Chapter 1 - Introduction - Agricultural Economics at McGill University

January 15, 2018 | Author: Anonymous | Category: Social Science, Sociology, Globalization
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Chapter 1,2 Agr Policy, Rent Seeking and History What Is Policy? deliberate course of action set of programmatic actions multiple objectives change the normal course of events more than simply a statement of a particular goal e.g. raise farm income, full employment (goals)

Agri-Food Policy Actions/programs ---> affect the Agri-Food system Every level input supply, farm, transformation and distribution, food processing retail sector consumer behaviour

Who/What is involved with Policy? Who ? Everyone is involved - directly or indirectly > (democratic) Primary stakeholders -- > politicians + bureaucrats

What Shapes Policy ? Preferences, Background, Attitudes, and Knowledge (P-BAK) (Brinkman) Knowledge

Background

Preferences

Attitudes

POLICY

Values

Facts Beliefs Goals

Beliefs That Underpin Recent Federal Agr & Food Policy General: Support by Canadians for farmers and farm programs Farming - depends on trade for growth Globalization/trade agreements - fact of life Important for Canada to fully participate in trade negotiations Growing pre-occupation with environment and food safety issues

Farmers: more competitive (bigger, technology, value added, risk management) more responsive to market signals – what the market wants more “self-reliant” – “free to manage their own operations” more diversity

Government programs, relations, services: Inter-provincial trade barriers Support the role of market signals – vs direct supports Stable, predictable business environment Large regional differences; relative strengths/efficiencies Programs seen as equitable Smart regulation; C/B, environmental impact assessment, voluntary standards Food safety: important to Canadians, also for trade (traceability) Science based (evidence) regulation; defensible

How We See/Interpret the World world wide price impacts - hard to insure (public vs private system) - motivation for government crop insurance

Farmer can influence outcome moral hazard + adverse selection

Boom and Bust Cycles: Good times - Bad times - design of policy difficult Boom - mid-1970's (Great Grain Robbery) prices good - acquire more land, bid up land prices land important collateral asset land prices increase + capacity to borrow renew equipment - larger machines - more land Bust - 1980 - 1986 prices decreased (grain wars EU/US) interest rates high service long-term debt credit crunch - bankruptcy - farm crisis

Market Structure: farmers – lack of countervailing power large numbers of farmers homogeneous product perishable commodities declining delivery points (grain and livestock) Cargill/ADM - 70% of Canadian beef slaughter

contract farming quality and supply reliability farmer owns fixed assets limited alternative marketing outlets

The Farm Problem Boom & Bust Cycles – low returns to labour & capital Why is there a persistent farm problem? Why has it not been fixed ? How should policy makers address the problem? Willard Cochrane: treadmill theory - technology Glenn Johnson: asset fixity, adjustment Don Paarlberg - government programs are the problem Susan Offutt - what is the problem anyway ?

Define/Identify the Problem

Simple solutions to complex problems can back fire

Growing Conflicts Between Farmers & other Stakeholders

204 acres sold fall 2009 – Beckett farms near Markham Ontario Toronto Greenbelt – “robbed” farmers

New Land Use Conflicts

Forests being clear-cut Lost Ecological Services

How to encourage better environmental stewardship

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