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OCR for page 25
1
Agriculture and the Economy
Go'
NE OF THE STRENGTHS OF U.S. AGRICULTURE iS the willingness of farm-
ers to adopt proven alternatives. This constant evolution and adop-
tion of new practices has helped the United States become a global leader
in agricultural research, technology, and production. Many of today's com-
mon practices were the alternative practices of the postwar era. One exam-
ple is monocultural production, which synthetic chemical fertilizers and
pesticides made possible. The widespread adoption of these alternatives,
referred to internationally as the "Green Revolution," led to dramatic in-
creases in per acre yield and overall agricultural production in the United
States and many other countries.
The historical pattern is clear: today's alternatives are tomorrow's conven-
tions. The committee believes that this is true for many of the agricultural
alternatives described in this report. For example, some farming systems
such as corn and soybean production using ridge tiliage, rotations, and
mechanical cultivation include new and old practices and satisfy this com-
mittee's definition of alternative agriculture (see the boxed article, "Defini-
tion of Alternative Agricultures. Nonetheless, much can be done to im-
prove most production systems and to accelerate the widespread adoption
of farming methods specifically designed to achieve the goals listed.
This chapter describes the changes in agriculture that have taken place
over the past 40 years in terms of technology and input use, a range of
fecleral government programs, the economy, and international trade.
Since the 1940s, agriculture has become more specialized and dependent
on purchased off-farm inputs. Technologr has facilitated specialization and
constantly increasing yields, with fewer larger farms producing more food
than ever before. Federal policy has responded to the farmer's needs in the
context of conflicting signals such as high per acre yield goals, surplus
25
OCR for page 26
26
ALTERNATIVE AGRICULTURE
production capacity, environmental considerations, and increased foreign
competition. Although there has been some improvement In the farm econ-
omy since the recession of the m~-l9SOs, unprecedented levels of federal
government support have financed much of this recovery. Disparities re-
ma~n In productive capacities, income, and regional rural economies, even
though total net farm income has reached record levels.
Farming is at the center of the food and fiber sector of the economy.
Farmers are the sole consumers of agricultural inputs and the principal
producers of the crops that support the multibiDion doDar food and fiber
industry. The production, processing, and sale of food and fiber currently
represent about 17.5 percent of the gross national product (GNP) or about
$700 billion In economic activity (Figure 1-1), the second largest sector of
700
600
500
._
._
In
Cal
200
100
Total food and fiber sector
~
/
/AII other food-related services
400 ~ /
Ad processing
Transportation, trade and retailing
O
1 975
1977 1979 1981 1983 1985 1987
YEAR
FIGURE 1-1 Food and fiber sector of the U.S. GNP. SOURCE: U.S. Department of Agriculture.
1987. Measuring the Size of the U.S. Food and Fiber System. Agricultural Economic Report
No. 566. Economic Research Service. Washington, D.C.
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AGRICULTURE AND THE ECONOMY
27
DEFINITION OF ALTERNATIVE AGRICULTURE
Alternative agriculture is any system of food or fiber production that
systematically pursues the following goals:
.
More thorough incorporation of natural processes such as nutrient
cycles, nitrogen fixation, and pest-predator relationships into the
agricultural production process;
Reduction in the use of off-farm inputs with the greatest potential
to harm the environment or the health of farmers and consumers;
Greater productive use of the biological and genetic potential of
plant and animal species;
Improvement of the match between cropping patterns and the pro-
ductive potential and physical limitations of agricultural lands to
ensure long-term sustainability of current production levels; and
Profitable and efficient production with emphasis on improved farm
management and conservation of soil, water, energy, and biological
resources.
.
GNP next to manufacturing (U.S. Department of Agriculture, 1987f) (Figure
1-2). Farming, however, accounts for only about 2 percent of total GNP;
inputs such as seed, equipment, and chemicals account for another 2 per-
cent; and processing, marketing, and retail sales account for nearly 14
percent (U.S. Department of Agriculture, 1986e).
TRADE
Exports of agricultural commodities exploded during the 1970s, from
about $7.3 billion in 1970 to $43.3 billion in 1981. Five major crops led the
way: corn, cotton, rice, soybeans, and wheat (Figure 1-3). By 1981 the
United States controlled 39 percent of total world agricultural trade and
more than 70 percent of world trade in coarse grains, greater than 10 times
the share of its nearest competitor, Argentina. During the 1970s, harvested
wheat acreage increased by more than the total harvested wheat acreage of
Canada (U.S. Department of Agriculture, 1986a; U.S. Office of Technology
Assessment, 1986a). Economic growth in developing nations, the opening
of Pacific Rim markets, grain trade with the Soviet Union, and a favorable
exchange rate that fueled increased demand made this growth possible. A
deliberate domestic policy designed to remove production controls helped
the United States profit from these favorable conditions. The expansion of
cultivated acres of wheat and feed grains, favorable tax provisions and
market prices, and readily available credit helped increase the domestic
supply of major commodities such as wheat, soybeans, corn, and other
coarse grains. Agriculture maintained a favorable annual trade balance,
OCR for page 28
28
800
700
600
an 500
o
._
._
Q
._
-
cn 400
o
300
200
100
o
ALTERNATIVE AGRICULTURE
Manufacturing
_
Food and fiber .
Finance, insurance, and real estate
_ ~ , ,, ,: , .,
;- ·2~~2~ 2
............. , ,., ,,,, ,,
Government enter
Transportation and .:.:.:.:.:.:.:.: .:.: :: :.:.:.:. :.:.:.:.::.:.: :.:.:.:.:.:.:.: :~: :::: :.::.
estate
SECTORS
FIGURE 1-2 GNP by sector, 1985. Food and fiber sector includes farm sector; food processing;
manufacturing; transportation, trade, and retailing; food; and all other nonfarm sectors.
SOURCE: U.S. Department of Commerce. 1987. Survey of Current Business. Washington, D.C.
while almost aD other sectors of the economy experienced growing deficits
From 19Si to 1986, many factors contributed to a decline in agricultural
exports. The loan rates in the federal commodity programs (the price that
the government guarantees farmers) were rigidly set well above interna-
tional market prices. This meant that most farmers sold their grain to the
government at the loan rate (in practice many turn over their grain for
forgiveness of the loan), instead of on the domestic or international market,
OCR for page 29
o
AGRICULTURE AND THE ECONOMY
9
8
7
6
-
~n
o
,_
._
~ 5
G
cn
4
3
2
1
29
1~\
Wit, !/J
COTTON
~ ~ _
,, i,,.
I ~
I \
/ \
/ \-
l
l
_— ~
,
At'
\\
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
1968 1970 1972 1974 1976 1978 1980 1982 1984 19861987
FISCAL YEAR
FIGURE 1-3 Value of selected agricultural exports. SOURCES: U.S. Department of Agriculture.
1983. Foreign Agricultural Trade of the United States—Annual Supplement—Fiscal Year 1982.
Economic Research Service. Washington, D.C.; U.S. Department of Agriculture. 1987. Foreign
Agricultural Trade of the United States—Annual Supplement—Fiscal Year 1986. Economic
Research Service. Washington, D.C.; U.S. Department of Agriculture. 1988. Foreign
Agricultural Trade of the United States: November/December 1987. Economic Research
Service. Washington, D.C.
OCR for page 30
30
ALTERNATIVE AGRICULTURE
where prices were lower. The U.S. government ended up buying and stor-
ing the largest domestic grain surpluses in history. To compound this, the
early 1980s brought global recession, increased production capacity in de-
veloping countries, an overvalued doDar, restrictive import policies and
export subsidies by major competitors, foreign clebt, and surpluses in major
commodities. Agricultural exports fen from $43 billion in 1981 to about $26
billion in 1986 (Figure 1-5~.
In 1987, the volume of agricultural exports increased for the first time in 7
years (Figure 1-6~. The increase was largely due to a decline in the value of
the doDar, faring world market prices, reduction in federal program loan
rates, and implementation of the export programs of the Food Security Act
of 1985 (U.S. Congress, 1985~. Export programs designed to counter foreign
subsidies, guarantee credit, ant! promote products accounted for 60 to 70
percent of wheat exports, greater than half of the vegetable of] exports, and
about 40 percent of all rice exports in fiscal year (FY) 1987. Most feed grain
and cotton exports were made outside these export programs (U.S. Depart-
ment of Agriculture, l98Sb). The value of agricultural exports, however,
60
30
u,
o
._
— -30
-60
en
~ -90
o
-120
-150
-180
Agricultural exports
Total trade balance
Agricultural trade balance
Nonagricultural trade balance
1 1 1 1 1 1 1 1 1 1 1 1
1970 1972 1974 1976 1978 1980 1982 1984 1986 1987
YEAR
FIGURE 1-4 U.S. agricultural export trends and foreign trade balances. SOURCES: U.S.
Department of Agriculture. 1988. 1988 Agricultural Chartbook. Agriculture Handbook No.
673. Washington, D.C.; U.S. Department of Agriculture. 1988. The U.S. Farm Sector: How
Agricultural Exports are Shaping Rural Economics in the 1980's. Agricultural Information
Bulletin 541. Economic Research Service. Washington, D.C.
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AGRICULTURE AND THE ECONOMY
50
An
¢ 20
Oilseeds and products
Total Other Fruits, nuts,
~ ~ ~,ottnn and veaetahle~
31
/
Animals
and products
YEAR
FIGURE 1-5 Value of U.S. agricultural exports by commodity. SOURCE: U.S. Department of
Agriculture. 1988. 1988 Agricultural Chartbook. Agriculture Handbook No. 673. Washington,
D.C.
180
Cl)
o
._
150
·p 120
._
-
cn
by
o
LL]
30
Total Other Cotton Fruits, nuts,
/~//~/,~ /and vegetables
O
1979 1 981
Animals
and products
1983 1985 1987
YEAR
FIGURE 1-6 Volume of U.S. agricultural exports by commodity. SOURCE: U.S. Department of
Agriculture. 1988. 1988 Agricultural Chartbook. Agriculture Handbook No. 673. Washington,
D.C.
OCR for page 32
32
45
40
35
oh
o
._
· _
G co
oh
20
o
~ 15
30
10
5
ALTERNATIVE AGRICULTURE
{:.:~:~.:.:.:.~:~::.:::X ~
Agricultural expel
/~ ~~ ~~ - I;
/.~:: : .: :.::::: agricultural trade surplus :.:.:.: : :: :.:.:.:
_~
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988
FISCAL YEAR
FIGURE 1-7 Agricultural exports, imports, and trade balance. Figures for 1988 are forecast.
SOURCES: U.S. Department of Agriculture. 1987. National Food Review. The U.S. Food
System—From Production to Consumption. NFR-37. Economic Research Service. Washington,
D.C.; U.S. Department of Agriculture. 1988. 1988 Agricultural Chartbook. Agriculture
Handbook No. 673. Washington, D.C.
increased only 7 percent, from $26 billion to about $28 billion in 1987.
Exports are expected to continue to increase to around $33 billion in 1988.
Imports, which have increased steadily since 1972, are expected to remain
constant at about $20 billion, resulting in an increase in the agricultural
tracle surplus to about $13 billion in 1983 (Figure 1-7~.
AGRICULTURAL INDUSTRIES
Mechanization and specialization increases, declining use of labor, and
closer links with the input and output industries have characterized U.S.
agriculture since World War Il. Agricultural productivity measured as out-
put per unit of labor has surpassed that of the nonfarm business sector for
more than a decade (Figure 1-~. Adjusted for inflation, inputs purchased
to produce farm output have increased from approximately $50 billion in
the early 1960s to over $80 billion in the early 19SOs. At no other time in
U.S. history have agricultural products generated more income after they
OCR for page 33
AGRICULTURE AND THE ECONOMY
33
leave the farm. During the same period, economic activity in these indus-
tries rose from approximately $235 billion to about $450 billion (U.S. De-
partment of Agriculture, 1986e).
Twenty-one million people were employed in the food and fiber economy
in 1985, down from 24.5 million people in 1947 (Figure 1-9~. But as a
percentage of the total work force, 41 percent in 1947 were employed in the
food and fiber industry compared to IS.5 percent in 1985. Increases in
employment in other sectors of the economy were largely responsible for
this drop. The percentage of those in the food and fiber sectors working off
the farm increased from about 60 percent in 1947 to nearly 90 percent in
1985. During the same period, the size of the work force involved in farming
fell from about 17 percent, or 10 million workers, to about 2 percent, or 2.5
minion workers (U.S. Department of Agriculture, 1987g).
The number of farmers has declined while the total U.S. population has
increased from 151.3 million in 1950 to 226.5 minion in 1980. The population
of employed workers increased from 56.2 minion in 1950 to 97.6 minion in
150
135
120
105
90
75
_
, ~
, ~
by"/ \ /
Nonfarm business sector
~ I
! Farm sector
/
-
60 I I ~ ;
1967 1969 1971 1973 1975
1977 1979 1981 ~ 983 1985
YEAR
FIGURE 1-8 Agricultural productivity measured by output per unit of labor. SOURCE: U.S.
Department of Agriculture. 1987. National Food Review. The U.S. Food System—From
Production to Consumption. NFR-37. Economic Research Service. Washington, D.C.
OCR for page 34
34
ALTERNATIVE AGRICULTURE
120 _
oh
o
- 80 _
._
_ _
100
c', 60
111
Y 40
o
20
o
01 Farm sector
Food and fiber sector
:::::::::1 Civilian labor force
60.2
24.5
-~L
64.5
8.0
24.0
_
115.5
21.4
1 947
1 954
YEAR
1 985
FIGURE l-9 Distribution of food and fiber system employment in the national economy.
SOURCE: U.S. Department of Agriculture. 1987. National Food Review. The U.S. Food System—
From Production to Consumption. NFR-37. Economic Research Service. Washington, D.C.
1980. In contrast, farmers accounted for 6.9 million of all employed workers
(or 12.2 percent) in 1950, and only 2.3 million employed workers (or 2.S
percent) in 1986 (U.S. Department of Agriculture, 1987c). Using about the
same amount of cropland, fewer farmers are feeding an ever-growing pop-
ulation (Figure 1-10~. This has been made possible by great increases in per
acre yields resulting from the development and widespread adoption of
fertilizers and synthetic chemical pesticides, improvements in machinery,
and high-yielcling varieties of major grain crops. Average yields have in-
creased 2 percent per acre annually since 1948 (U.S. Department of Agricul-
ture, 1986b). Average yields per acre of corn, soybeans, and wheat increased
from 38.2, 21.7, and 16.5 bushels per acre in 1930 to ITS, 34.1, and 37.5
bushels per acre in 1985, respectively. Cotton yields increased from 269
pounds per acre in 1950 to 630 pounds per acre in 1985 (U.S. Department
of Agriculture, 1972, 1986d, 1987g). Average annual milk production per
cow increased from 5,314 pounds in 1950 to 13,786 pounds in 1987 (CaTifor-
nia Department of Food and Agriculture, 195S, 1972, 1987~. Poultry produc-
tion rose from about 5 million birds in 1960 to nearly 20 million birds in
1987 (U.S. Department of Agriculture, 19891.
These great increases in yield and production have helped keep the price
of food in the United States low as a percentage of per capita income.
Americans spend only about 15 percent of their total personal disposable
income on food. This figure is down from about 16.5 percent 10 years ago,
largely because of the relatively rapid rise in personal income. The percent-
age of income spent on food varies greatly with income. Families with
OCR for page 35
AGRICULTURE AND THE ECONOMY
400
-
cn
o
._
._
G
300
`~, 200
LIJ
A:
100
r
mer fallow
a..:.:.:..:.:.:
- ma
~ ~ .
~ ~ ~ .
A, ~< .
Cropland han/este~ ~ ~ .
~ l ~ ~ .
1~ . ~ ~
Tote , ~ _'
1945 1955 1965
YEAR
35
1975 1 985
FIGURE l-lO Cropland harvested since 1945. SOURCE: U.S. Department of Agriculture. 1988.
1988 Agricultural Chartbook. Agriculture Handbook No. 673. Washington, D.C.
before-tax annual incomes of less than $5,000 spend 49.7 percent of those
incomes on food; families with incomes greater than $40,000 spend S.7
percent (U.S. Department of Agriculture, 1986g, 1987g). Western Europe-
ans, in contrast, spent an average of 23.8 percent of household disposable
income on food in 1983. Families in many less-developed countries spend
well over 50 percent (U.S. Department of Agriculture, 1986h). Since 1980,
the consumer price index (CPl) for food has risen more slowly than the CPI
for all other items (U.S. Department of Agriculture, 1986g) (Figure 1-11~.
A decreasing amount of the total spent on food reaches farmers (Figure
1-12~. This is a result of two factors: (1) the increased consumption of
prepackaged foods and corresponding costs for processing, packaging, mar-
keting, and retailing and (2) the increasing percentage of meals consumed
away from home. In 1987, consumers spent about $380 billion for foods
produced on farms in the United States (Figure 1-13~. Preliminary 1987 data
show that farmers received about $90 billion or 25 percent of the $380 billion
spent on all food the rest went to the food industry (Figure 1-14~. As con-
sumers spend more on food, marketers and processors have gained signifi-
cant revenue. The financial returns to the farmer have remained roughly
constant, but represent a shrinking piece of a growing pie. Food marketing
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78
ALTERNATIVE AGRICULTURE
simplify farm management. Until recently, research has generally not delib-
erately addressed the possibility of maintaining current levels of production
with reduced levels of certain off-farm inputs, more intensive management,
increased understanding of biological principles, or greater profitability per
un* of production with reduced government support.
Yet, increased international competition, the decline in world market
prices for most commodities, and the relatively high percentage of total
variable costs for inputs needed to achieve current high yields warrants a
reassessment of farming practices, research, and the effects of policy on
farm decision making. In general, further increases in yield are an ineffec-
tive means of achieving greater profitability or international competitive-
ness. For many crops like corn, cotton, wheat, and small grains, higher
yields are often justified in terms of profitability only in the context of
government support, particularly high target prices. The added costs of
purchased inputs soon become more than the free market value of the
aclded yield. Moreover, high-yield, specialized production systems can re-
sult in more variable yields than diversified systems that also reduce per
unit input costs (Helmers et al., 1986~. This is especially true when rainfall
or other climatic conditions cleviate far from the norm (Goldstein and Young,
1987; Lockeretz et al., 1984~.
Increased yield variability can also raise risk and capital costs. Farmers
growing commodity program crops, however, are often willing to take this
risk, because government commodity payments provide an economic safety
net that does not depend on annual harvested production. Disaster relief
and crop insurance benefits may also be available, further reducing the risk
borne by farmers. In years when high yields are attained, farmers may have
an opportunity to raise the proven yield that is used as the basis of future
program benefits and insurance settlements. When high yields fail, disaster
payments and insurance program mechanisms protect farmers. These pro-
grams are expensive, however. The economic, agronomic, and environmen-
tal consequences associated with these practices are leading to fundamental
changes in the targets for agricultural research and education. Throughout
the system, a new emphasis is being placed on identifying crops better
suited to a region's natural resources and to reducing costs per unit of
production, sometimes even at lower per acre yields.
Other Programs and Policies
Soil Conservation Programs
Soil conservation and other federal farm policies have been linked since
the Soil Conservation and Domestic Allotment Act of 1936. This connection
was politically expedient. When pictures of the Dust Bowl were a symbol of
the Great Depression, the public was willing to pay farmers to shift from
erosion-prone crops to soil-conserving land uses. The soil-conserving crops
such as hays and forages were not in surplus, while crops that generally
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AGRICULTURE AND THE ECONOMY
79
require more tiDage and often result in higher rates of erosion, such as corn,
wheat, and cotton, were in surplus. Reducing the acreage devoted to these
crops provided an opportunity to reduce erosion through cover crops or
other conservation measures. Since the 1940s, conservation programs have
done better in times of depressed prices and surpluses and worse in periods
of strong prices and expanding production.
Voluntary compliance or participation has been an underlying principle
of soil conservation programs since their inception. The government has
historically relied on the "carrot," such as availability of free technical assis-
tance, cost-sharing funds, and commodity program benefits, rather than
the "stick" of mandatory compliance or penalties. The price and income
support aspects of farm programs have dominated environmental and con-
servation considerations. This was particularly apparent in the mid-1970s
through the mid-1980s, when expanding production exacerbated erosion
losses. As production expanded, there were no policies in place to slow the
conversion of wetlands or highly erodible grasslands to cultivated crops.
Nor were there policies to slow the resulting steady growth in commodity
program base acreage allotments.
Congress addressed this problem in the Food Security Act of 1985 by the
adoption of the so-called sodbuster and swampbuster provisions. The sod-
buster provision denies aD federal program benefits to farmers who plow
highly erodible lands without first adopting a locally approved soil conser-
vation plan. The swampbuster provision denies benefits to farmers who
drain or otherwise convert certain wetlands to cultivated crop production.
Soil and water conservation measures often require continuous refine-
meet, maintenance, and good management to reduce erosion significantly
and protect water quality. In periods of high commodity prices and strong
demand, some farmers have planted grain crops on almost all available
land, with few steps taken to reduce soil and water runoff. Farmers who
have continued conservation practices in boom years lost opportunities to
build base acreage and, in some cases, forfeited chances to improve their
farms' proven per acre yield and payments.
In response to this inequity, the Food Security Act of 1985 incorporated
several mechanisms designed to simultaneously control surplus production
and reduce soil erosion on the most highly erodible land. The CRP pays
farmers to take their most highly erodibie land out of production for 10
years. Over 60 percent of the land now in the CRP is drawn from crop base
acres. Nearly half of the base acres now in the CRP are from the wheat
program (Table 1-7~. As of February 198S, 25.5 million acres had been idled
under the CRP (Table 1-3~. Five million to 10 minion more acres are expected
to be idled over the next 2 years. It is noteworthy that even though set-aside
acreage from the commodity programs and the CRP idled nearly 70 million
acres in 1987, excess production capacity of major commodities remained
near its highest point at 16 percent of potential output (Figure 1-371. (Excess
. , ~ ~ . , ~ . ~ ~ ~ .~ ~ ~ ~ .
1 ~ ~ ~ ~ ~ ,
production capacity is defined here as the difference between potential
output and commercial demand at prevailing farm prices.)
Another feature of the Food Security Act of 1985, the conservation com-
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80
ALTERNATIVE AGRICULTURE
TABLE 1-7 Commodity Base Acres Enrolled in CRP Through July 1987
Million Acres
Base
Total Base Acres Percentage of
Acres Enrolled Base Acres
Crop in 1985 in CRP Enrolled in CRP
Barley 12.4 1.8 14.5
Sorghum 18.9 1.7 9.0
Oats 9.2 0.8 8.7
Wheat 91.7 6.8 7.4
Cotton 15.4 0.9 5.8
Corn 82.2 2.7 3.3
Rice 4.1 — —
Peanuts 1.5a
Tobacco 0.7a _ _
Total 236.1 14.7 6.2b
NOTE: The dash indicates that the values were negligible.
aAcres harvested.
bThis figure represents the percentage of all crop base acres.
SOURCE: U.S. Department of Agriculture. 1987. Agricultural Resources—Cropland, Water, and
Conservation—Situation and Outlook Report. AR-8. Economic Research Service.
Washington, D.C.
TABLE 1-8 Regional Distribution of Acres Enrolled in CRP Through
February 1988
Acres Share (percent) Percentage
Enrolled of U.S. Acres of Region's
Region (in millions) Enrolled Cropland
Northeast 0.13 0.5 0.8
Lake States 2.07 8.1 4.7
Corn Belt 3.56 13.9 3.9
Northern Plains 6.04 23.7 6.5
Appalachia 0.86 3.4 3.8
Southeast 1.25 4.9 6.8
Delta States 0.78 3.0 3.5
Southern Plains 4.10 16.1 9.1
Mountain 5.22 20.4 12.1
Pacific 1.51 5.9 6.7
United States 25.53 100.0 6.1a
aThis figure represents the percentage of all crop acres.
SOURCE: U.S. Department of Agriculture. 1988. Agricultural Resources—Cropland, Water, and
Conservation—Situation and Outlook Report. AR-12. Economic Research Service.
Washington, D.C.
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AGRICULTURE AND THE ECONOMY
81
pliance provision, will require farmers wishing to retain eligibility for gov-
ernment program benefits to implement recommended conservation plans
beginning in the 1990 growing season. To retain eligibility for any govem-
ment program—diversion payments, deficiency payments, CCC commodity
loans and storage payments, Farmers Home Administration (FmHA) loans,
government loans for storage facilities, federal crop insurance, and conser-
vation reserve payments farmers must manage ah highly erodible fields in
accordance with an approved soil conservation plan by 1995. Between 80
minion and 95 minion acres win require these plans, although more than 25
minion of these acres are now in the CRE
The impact of conservation compliance on farming practices is not known,
although no-tiDage or conservation tiDage practices are often recommended
for highly erodible land. In many instances, alternative farming systems
390
370
360
350
a'
o
._
._
_ 320
an
LL
G
340
330
310
300
290
270
260
250
~ Conserving uses
O Crop acres planted
= ~ . ~ _ _
Excess pr d anti r ca pa city
1 11111111 1
1970 1975 1980 1985
YEAR
20
or al
15 g
Z ~
O c,0
tin
~ O
10 t!: ~
~~ O
co cat
oh
lo
X O
111 IL
O
FIGURE 1-37 U.S. crop acreage in conserving uses compared with excess production capacity.
Major crops include wheat, feedgrains (corn, barley, sorghum, and oats), soybeans, and
cotton. Excess production capacity is the difference between potential output and commercial
demand at prevailing market prices. SOURCE: U.S. Department of Agriculture. 1988. 1988
Agricultural Chartbook. Agriculture Handbook No. 673. Washington, D.C. Revised data from
Economic Research Service, USDA.
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82
ALTERNATIVE AGRICULTURE
may be used to sustain high levels of crop production and comply with the
erosion control goals sought under conservation compliance. Future gov-
ernment policy may provide new incentives for farmers to develop alterna-
tive crop management systems that protect environmental quality and
maintain current levels of production and farm incomes.
Pesticide Licensing
About 600 pesticide active ingredients are registered for use in the United
States. Approximately 200 active ingredients, however, account for over 95
percent of aD agricultural pesticide use. Congressional policy and the EPA's
application of current law regulating pesticides have resulted in a slow,
deliberate pesticide regulatory process. From the inception of the EPA spe-
cial review program in 1975 through September 30, 1987, the agency com-
pleted 40 special reviews or risk-benefit analyses of the most hazardous
pesticides. These reviews resulted in 5 cases where all agricultural uses
were cancelled, 34 cases where some uses were cancelled or restrictions
imposed, and 1 case where no action was taken. These cases do not include
the cancellation of all food uses of aldrin, chlordane, chlordecone, DDT,
dieldrin, and heptachlor, nor the voluntary cancellation of all or some uses
of 21 other active ingredients that occurred outside the special review proc-
ess (U.S. Environmental Protection Agency, 1987~. Between 1975 and 1987,
these reviews took from 2 to 7 years to complete, with some important
reviews still outstanding. Recently, however, the review process has been
expedited and newly initiated reviews may now take an average of 1~/2 to 3
years (U.S. General Accounting Office, 1936~. Legal challenges commonly
delay the final resolution of regulatory actions, as does the sheer size of the
task in comparison to available EPA resources.
Since the amendment of the Federal Insecticide, Fungicide and Rodenti-
cide Act (FIFRA) in 1972, through 1987 the EPA registered 69 new insecti-
cides, 60 new herbicides, and 31 new fungicides (U.S. Environmental Pro-
tection Agency, 1938) (see Figure 1-20~. New products are generally
subjected to stricter standards before they gain market entry than are exist-
ing products with which they would compete. Typically, these pesticides
are safer and more biologically benign. In some cases, new compounds that
are safer than the existing products they might replace have been denied
registrations, while more hazardous products were left on the market (Na-
tional Research Council, 1987~. Current regulations are complex, sometimes
inconsistent, and exceedingly difficult to implement. The Delaney Clause
(1958) of the Federal Food, Drug and Cosmetic Act of 1954 offers the best
example of inconsistency. This provision of the law forbids the residues of
pesticides in any processed food that induce cancer in laboratory animals if
those residues concentrate above the level aBowed on the raw food. The
Delaney Clause, however, does not apply to raw foods with no processed
form or to carcinogenic pesticides that do not concentrate in processed
foods. Consequently, residues of the same carcinogenic pesticides are al-
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AGRICULTURE AND THE ECONOMY
83
lowed on certain fresh and processed foods, but not in processed foods
where they concentrate. Further, the EPA has applied the Delaney Clause
only to new pesticides, thereby maintaining registrations for many older
pesticides that pose risks acknowledged by the EPA to be greater than those
posed by most new substitute chemicals (National Research Council, 1987~.
The benefit-assessment methods employed by the EPA are also a concern.
The EPA does not, as a matter of routine procedure, incorporate alternative
or nonchemical pest control methods into its assessment of pesticide bene-
fits when carrying out a regulatory review (U.S. Congress, 1988~. As a
result, the benefits of currently used products are sometimes inflated, and
the economic values of alternatives are not taken into account or formally
recognized and acted upon. The most recent example of this is the EPA's
review of the herbicide alachior. AlachIor is the most widely used pesticide
in the nation. It is used to control grassy weeds on 30 percent of the corn
and 25 percent of the soybeans produced in the United States. The benefits
analysis in this review was confined solely to an economic comparison of
the benefits of alachior with those of a similar herbicide, metolachIor (U.S.
Environmental Protection Agency, 1986a). The comparative economic ben-
efits and costs associated with the use of cultivation, tilIage, and planting
techniques that are used effectively by many farmers to control similar
weeds were not considered in the analysis (see the Spray, BreDahI, Sabot
Hill, Kutztown, and Thompson case studies). According to John Moore,
former EPA assistant administrator for pesticides and toxic substances, the
alachior benefits assessment is representative of most EPA pesticide benefits
assessments. These assessments routinely consider only the benefits of the
most likely alternative pesticide, ignoring all other alternative control strat-
egies (U.S. Congress, 1988~.
Food Quality and Safety
Food safety regulations and meat inspection programs are primarily de-
signed to prevent health risks and acute illnesses from chemical and micro-
bial contaminants in food. These regulations, however, do not enhance food
quality. For example, meat-grading standards have traditionally rewarded
producers of fatty beef. Cosmetic standards for fruits and vegetables can
encourage late-season pesticide use that results in higher residues in food.
Certain poultry slaughter practices result in a high prevalence of microbio-
logical contamination. Methods of producing food with fewer of these in-
herent risks are wed known and widely practiced (see the case studies in
this report; Allen et al., 1987; National Research Council, 1985, 198Sb).
The EPA reviews health and safety data and establishes tolerance levels
for pesticide residues in foods that are thought to present minimal health
risks. Foods with pesticide residues up to these levels are then allowed in
the market. The FDA then monitors food for compliance with these toler-
ances. For some types of risk, however, particularly cancer risk, there re-
mains considerable debate about the certainty of the data and assumptions
supporting calculations of acceptable risk. Moreover, the monitoring does
OCR for page 84
84
ALTERNATIVE AGRICULTURE
not regularly check for many widely used pesticides, including a number of
widely used compounds classified by the EPA as probable human carcino-
gens (U.S. Congress, House, 1987~.
Livestock are being fed an increasing amount of various by-products from
the processing of agricultural commodities. This is particularly true in states
like California and Florida that produce a great variety of commodities
(National Research Council, 1983~. By-product feeds like citrus pulp, tomato
pomace, and almond huDs are valuable livestock feeds with nutritive and
economic value often comparable to that of feeds produced exclusively for
animal use. Many of these feeds, however, have not been historically rec-
ognized as animal feeds. Because of this, many pesticides used on these
commodities do not have tolerances for residues in by-products used as
animal feed or in the ensuing animal food product. The potential for the
introduction of these pesticides into food-producing animals is unknown.
While animal food products may contain residues of the pesticides found
in nontraditional animal feeds, the EPA has generally not examined the fate
of pesticides in animals consuming these feeds or the food products derived
from them (National Research Council, 1987~.
There is also concern about combinations of residues on food to which
people may be regularly exposed (National Research Council, 198Sa). The
EPA sets acceptable levels for residues in food for each pesticide separately,
although many combinations of pesticides are regularly used and detected
on food crops. Even though risks from pesticides are presumed to be addi-
tive, acceptable levels of exposure are calculated assuming exposure to each
pesticide in isolation. Some chemicals, moreover, may act synergistically.
Current regulations and standards do not assess or incorporate margins of
safety reflecting the possibility of synergistic or add*ive effects.
The federal government also sets grading standards for farm products.
Beef grading tended to equate high-fat content with high quality in Prime
and Choice cuts for example, until recent changes in grading standards.
Excessive consumption of animal fat is known to raise the likelihood of
heart disease (National Research Council, 198Sb). Similarly, the USDA grad-
ing standards and milk pricing standards reward producers for butterfat
content of milk. Since the 1940s, however, butterfat consumption has de-
clined dramatically, while consumption of low-fat and nonfat dairy products
has increased. Consequently, the butterfat-based pricing system has re-
sulted in large government-held surpluses of butter, despite the capability
of producers through genetics and management to produce lower-fat
products.
SalmoneHae also remains a significant concern, particularly in poultry
products. A National Research Council study reported that about one-third
of aD poultry sold is contaminated with salmoneHae. Although salmoneHae
is controlled by proper cooking and sanitation, not aD people follow rec-
ommended food handing procedures. The possibility of resistant strains
and human health problems following infection remains a concern (Institute
of Medicine, 1989; National Research Council, 1985~.
OCR for page 85
AGRICULTURE AND THE ECONOMY
85
SUMMARY
Agriculture produces the essential elements of the $700 billion food and
fiber economy. Since World War IT, agriculture has become more specialized
and dependent on off-farm inputs and has substantially increased per acre
yield. Machinery, pesticides, irrigation water, fertilizers, and antibiotics have
replacecl land, diversity, and labor as principal components of agricultural
production. Fewer and larger farms produce more food and fiber than ever
before. Government commodity income and price support programs, tax
policy, and agricultural research heavily influence on-farm decision making
in major sections of U.S. agriculture. Producing food to meet government
criteria, however, often precludes farmers from responding to changing
market conditions or imposes financial penalties for practices that improve
food safety and environmental quality.
In the midwestern states, government programs ant! subsidies have re-
duced the risk of specialization and thus encouraged the separation of
livestock operations from feed grain production. The result is a decline in
two important agricultural practices: return of animal manures to the soil
and rotation of cultivated crops with grass and leguminous forages. Feed
grain production without livestock or legumes requires additional commer-
cial fertilizer and often entails increased pesticide use to compensate for the
lost pest control benefits of rotations. The increase in confinement livestock
operations, particularly for swine and poultry, correlates with the subther-
apeutic use of antibiotics to promote growth and to suppress disease inci-
dence. Between 80 and 95 percent of program crop acreage is currently
enrobed In the federal commodity programs. The base acres and cross-
compliance provisions of these programs will penalize growers who want
to adopt diversified crop rotations or integrated livestock feed and forage
operations on this land.
There are many economic and environmental problems to be solved that
are associated with current conventional agricultural practices. However, a
substantial number of growers practice many systems that provide solu-
tions, in spite of actual disincentives or little support from federal pro-
grams. Chapter 2 describes some of the major problems derived from con-
ventional practices. Subsequent chapters describe the alternatives.
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