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Letter from the Agricultural and Applied Economics Association

Given current discussions in Washington about the federal budget for agricultural research and with discussions about reorganization of the USDA in the air, the leadership of the Agricultural and Applied Economics Association (AAEA) was compelled to compose a letter to the Secretary of Agriculture and other Congressional leaders.  

Here's an excerpt.

The AAEA highly values the support for economic research, education, extension, and analysis that the United States Department of Agriculture (USDA) provides to the food and agricultural sector. We understand that this is a critical time for the development of this sector, as the sector embarks on important visionary activities and the USDA develops a new action plan for the Research, Education, and Economics (REE) Mission Area. As these activities unfold, we want to emphasize the value of social science research; point out the strength of the current USDA economic research, education, and extension programs; and highlight principles for continued success in economic research to serve the U.S. agricultural, food, and resource sectors and the public good. It is our perspective that economic programs within the USDA should be guided by the following five principles:

• Provide accurate, timely, and precise information on the state of the food and agricultural economy to improve the decision making of farmers, consumers, agribusinesses, and policy makers.
• Uphold and respect statistical directives and privacy laws; maintain the independence of principal statistical agencies from policy-advising units within government.
• Conduct applied and fundamental research to better understand the drivers of the health of the U.S. population, the robust nature of the U.S. food and fiber system, and the competitiveness of U.S. agriculture.
• Ensure that policy makers have timely and through analysis to ensure evidence-based policy that results in high quality, up-to-date evaluation of policies and programs.
• Increase the quality and quantity of economic and social science research conducted by the USDA.

The full letter is here.

On Mother Earth and Earth Mothers

I just returned from the Breakthrough Dialogue, where I gave a talk in a session on "Eating Ecologically" in a panel with Tamar Haspel of the Washington Post, Danielle Nierenberg of Food Tank, and Pedro Sanchez at University of Florida.  I thoroughly enjoyed our session and the rest of the Dialogue.  

At the dialogue, the participants were given the latest copy of the Breakthrough Journal, and I was struck by an article by Jennifer Bernstein titled the same as this post (I haven't been able to find a link to an online copy of the paper yet but I presume it will eventually appear at the link above).

Here is an excerpt from the introduction: 

Chastising the typical household for spending a mere 27 minutes a day preparing food, Pollan champions increasingly time-consuming methods of food production in defense of the allegedly life-enriching experience of cooking he fears is rapidly being lost.

The juxtaposition is jarring, if not much remarked upon. At a moment in history when increasing numbers of women have liberated themselves from many of the demands of unpaid domestic labor, prominent environmental thinkers are advocating a return to the very domestic labor that stubbornly remains the domain of women.

You may never have heard that agricultural productivity growth is (or should be) a feminist cause, but here Bernstein makes a strong case:

At bottom, feminist thought and action are incompatible with poverty, agrarianism, and neoprimitivism. Modern notions of rights, identity, and agency cannot be reconciled with premodern social, economic, and political arrangements. Female empowerment, in the long run, requires modern agriculture, energy, and infrastructure. Environmental ethics that reject those prerequisites in the name of the natural and pastoral are, simply put, irreconcilable with feminism.

Food Waste Research

Back in 2013, I wrote this post decrying the lack of good research on the economics of food waste.  It wasn't that no research was being done on the issue, only that a lot of the research that had been published at that time is what I'd call food waste accounting, which didn't didn't rely much on the economic way of thinking.

I'm pleased to now see a nice stream of economic research on the subject.  I've blogged on several of these papers before, but now many are starting to appear in print at peer reviewed journals.  Here'a a hopefully handy list of references.

  • "On the Measurement of Food Waste" by Marc Bellemare,  Metin Çakir,  Hikaru Peterson, Lindsey Novak, and Jeta Rudi, forthcoming the American  Journal of Agricultural Economics (This is an important - and likely to be influential - paper that is critical of previous attempts to measure the economic costs of waste and suggests better ways forward).
  • "A Note on Modelling Household Food Waste Behavior"  by Brenna Ellison and me, published in Applied Economics Letters in 2017 (This is a short note showing what is probably obvious to every economist but perhaps not to others: that the optimal amount of waste isn't zero and it depends on various economic variables like food prices and income).
  • "Food waste: The role of date labels, package size, and product category" by Norbert Wilson, Brad Rickard, Rachel Saputob,  and Shuay-Tsyr Hob, published in Food Quality and Preference in 2017 (The authors crafted a clever experimental approach to measure waste in a lab setting and looked at how how measured wasted varied with across date labels, among other factors).
  • "Social-Optimal Household Food Waste: Taxes and Government Incentives" by Bhagyashree Katare,  Dmytro Serebrennikov,  Holly Wang,  and Michael Wetzstein published in the American Journal of Agricultural Economics in 2017 (This paper presents a more developed model than in the Ellison and Lusk paper mentioned above including factors like externalities; they  likewise situate food waste in the context of optimal consumer decision making, considering the effects of various policies on the social well-being).
  • "Examining Household Food Waste Decisions: A Vignette Approach", a working paper by Brenna Ellison and me (This paper uses vignettes to study how food waste behaviors vary with various economic variables and consumer demographics).
  • "Foodservice Composting Crowds out Consumer Food Waste Reduction Behavior in a Dining Experiment", a working paper by Danyi Qi and Brian Roe (This paper also constructs an economic model of food waste behavior and studies how consumers' waste behaviors respond to information about whether waste is composed).
  • "Food loss and waste in Sub-Saharan Africa: A critical review", by Megan Sheahana and Chris Barrett published in Food Policy in 2017 (This is a helpful review paper that discusses the economics of food waste in a developing-country context; the focus is much broader than just considering household food waste, which is the focus of many of the above papers). 

There are no doubt other papers out there on the subject.  Let me know what I've missed.

 

If you brew it, who will come?

That's the title of a new paper I have with Trey Malone in the journal Agribusiness.  The paper uses survey data from over 1,500 U.S. beer drinkers to investigate different types of consumers (or market segments) mainly based on familiarity and taste perceptions of different brands.  Trey pulled together these figures based on the different segments identified.

We had this to say:

the objective of this article is to compare differences in perceptions for each of the brewery groups (domestic, import, large craft, and microbrewery).Figures 4 and 5 display the taste perception and brand familiarity averages for each beer segment we included. As canbe seen in Figure 4, the uninformed cluster has consistently low perceptions of the taste of the beers in all segments,whereas the maven cluster has consistently high perceptions of taste of the beers in all segments. Premium patronsrate the domestic beers as one of the worst tasting and appreciate the taste of the large craft and import optionssubstantially more. Traditional drinkers prefer the taste of domestic and import beers more than the beers provided inthe large craft and microbrew segments. Finally, the locavores did not heavily prefer the taste of any of the beers. Ascan be seen in Figure 5, few consumers were familiar with the microbrew options at all, although the mavens weremost familiar. Uninformed participants were only somewhat familiar with the other beers in the sample, whereasthe premium patrons were very familiar with all of the beers in the sample, with the exception of the microbrews.Traditional drinkers were most familiar with domestic and import beers, whereas the locavores were also very familiarwith all of the beers with the exception of the microbrews. These differences in perceptions suggest that consumers inthe locavore segment, while unfamiliar with the microbrews listed, still consider those beers to taste good.

Impact of Bird Flu on Turkey Producers

There's an interesting new paper in Applied Economic Perspectives and Policy by Cakir, Boland, and Wang that studies the impacts of the   2015 highly pathogenic avian influenza (HPAI or avian flu) outbreak in the US.  The authors draw attention to the free-trade deals signed by our trading partners and highlight a beneficial aspect of those trade deals that allow other countries to place bans on imports only only those specific regions or states that have infected animals.  As the authors show, the economic losses from the bird flu outbreak would have been much worse had other countries simply banned all imports of US turkey.  

Here are the author's main findings:

Our main findings show that the U.S. turkey producers lost approximately $225 million due to the 2015 HPAI outbreak. Of the $225 million, $101 million is borne by the producers in Minnesota and $124 million is borne by the producers in other states outside Minnesota. Furthermore, the results show that $207 million of the total loss to turkey producers is due to the loss in exports. In particular, the decrease in exports affects the producers in states outside Minnesota, costing them about $181 million. The additional loss to Minnesota producers due to the loss in exports is about $26 million. The counterfactual decrease in exports had the importing countries not used rolling bans during the 2015 outbreak is unknown. However, the model estimates indicate that for every percentage point of additional exports during the outbreak the U.S. turkey producers avoided a loss of about $6 million.

This is from the conclusions:

Our ex-post analysis of the 2015 HPAI outbreak provides important insight into the value of effective communication with domestic stakeholders and trading partners. Many national media predicted that the economic impact of the avian flu on the U.S. turkey industry was going to be dramatic in early 2015. There is no doubt that the economic impact was great. However, the total estimated producer loss would have been much greater if a domestic food scare had happened or if many of the importing countries did not implement regional bans. The ability of the U.S. turkey industry to work with U.S. and international stakeholders who included scientists, veterinarians, and others through protocols established in SPS policies in free trade agreements facilitated trade in U.S. turkey products to continue. This provided great benefits to the turkey producers during a difficult period. In fact, the model estimates indicate that for every percentage point of additional exports during the outbreak the U.S. turkey producers avoided a loss of about $6 million.