Value of USDA Data

Today, the Council on Food, Agricultural, and Resource Economics (C-FARE) released a report I lead authored on the value of USDA Data Products entitled From Farm Income to Food Consumption: Valuing USDA Data Products.

Frequent readers of this blog know my free-market orientation.  Provision of information is, however, one of those areas where the government (potentially) has a legitimate role to play  (the report itself discusses these motivations).  In the book Free to Choose, Milton and Rose Friedman, in their discussion of the proper role of government, use the analogy of government as umpire - not a player in the game or picking sides, but a facilitator and enforcer of the rules of the game.  Providing information on prices, production, etc. is, in my mind, an umpire-like role.  And a potentially useful one at that. 

Now that doesn't tell us anything about whether the government is providing too little or too much information, whether it is doing it cost effectively, or whether private companies might fill the gap if the government stopped providing information.  And these were the sorts of questions the report sought to provide insight into.  One of the things we learned is that we just don't know as much about those questions as we probably should.  

Interestingly (and perhaps ironically), the report was set to release the day the government shutdown occurred.  After the shutdown, the USDA blocked access to most of its online data sources, which I personally found annoying because it is hard to see how it requires any additional cost to run to servers that provide the data vs. the servers that put up pages blocking me from the data.  It came across as a show of power and blatant attempt to make the shutdown more difficult than it need be - hardly a way to make the public believe this is "our" government owned by "us" (admittedly, there may have been legal reasons of which I am unaware explaining why the data couldn't be displayed).  

In any event, the shutdown provided an interesting case study into the value of USDA to many agricultural sectors.  There was a lot of hand wringing, for example, in livestock industries because many cattle and hogs are priced on some formula based off of a USDA reported price (which went unreported during the shutdown).  However, there were several stories (e.g., here or here) of feedlots and packers quickly adjusting, and I suspect that if the shutdown would have continued longer, new institutions would have evolved to fill the role that the USDA data currently serves.  They may not have been as efficient or trustworthy (or they might be more so), we just don't know.  An aspiring researcher could use the government shutdown as one way to test how the provision of USDA data affects market performance.  

One of the key outputs of the C-FARE report is a strategy or approach for the USDA to use when prioritizing data products.  Regardless of one's view on the appropriate size of government, I think we would all agree that it is good that the government uses whatever resources it acquires most effectively.  In a climate of tightening budgets, that means thinking carefully and systematically about which data product eliminations (or which alterations in data products) are most efficient.  I hope the report can help, even if just a little, in that task.