AEB 6225 - Public Policy and the Agribusiness Firm

This course focuses on understanding the policy - development process and analyzing domestic and international policies and their influence on the decisions and success of agribusiness firms. Emphasis will be placed on developing a policy perspective and an understanding of the significance of policy dynamics. Various policy environments, drivers, mechanisms and processes will be analyzed. The economic and political forces underlying policy formation and change will be examined. The impact of current policies and policy issues on agribusiness firms, the relationship between policy signals and firm decisions, and the avenues for influencing the policy process will be explored. Policies considered include those associated with domestic agricultural price and income support, international trade, competition, the environment, food safety, biotechnology, country – of – origin labeling, traceability, economic development, agroterrorism and globalization. U.S. policies are compared with those which influence agribusinesses in other countries.

Textbook:

Schmitz, Andrew, Charles B. Moss, Troy G. Schmitz, Hartley W. Furtan., and H. Carole Schmitz. 2010. Agricultural Policy, Agribusiness, and Rent-Seeking Behavior, Second Edition. Toronto: University of Toronto Press.

Homework	15%
Two Mid Term Examinations	50%
Final Examination	30%
Class Participation	5%

Homework will be due in a week increment. Each assignment will be handed out at the beginning of each increment and will involve topics covered over that time span. For example, the first assignment will involve the derivation of the first and second order necessary conditions for an unconstrained mathematical formulation.

Online TechSmith Recordings of Lectures – Catalog

Agricultural Policy: Agriculture and Agribusiness Environments – Chapter 1
- Agricultural Policy and Budgetary Outlay [Aug 28 – Section 1.1]
- Agriculture and Its Changing Nature [Aug 28 – Section 1.2]
  - Overheads
- Instability and Uncertainty in Agriculture [Aug 28 – Section 1.3]
- Boom-Bust Cycles: The Importance of Wealth [Aug 30 – Section 1.4]
  - Overheads
  - Park, C.-H., and S. H. Irwin. 2005. “A Reality Check on Technical Trading Rule Profits in US Futures Markets.” Proceedings of the NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management. St. Louis, MO. [http://www.farmdoc.uiuc.edu/nccc134] pdf Paper
  - Willaim Vickrey Nobel Prize Facts
  - Scott - After 3 Days in the Spotlight, Nobel Prize Winner is Dead NY Times
  - Technical Trading
- Agribusiness and Contract Farming [Aug 30 – Section 1.5]
  - Agricultural Contracting Update: Contracts in 2008
- Farm Policy, Government Support Levels, and Effective Lobbying [Sept 4 – Section 1.6]
  - Lecture notes on solving the Cobb-Douglas cost function Webpage
  - Public Choice Literature
    - Introduction to Public Choice - George Mason University PowerPoint
    - Formaini, R.L. 2003. James M. Buchanan — The Creation of Public Choice Theory Economic Insights 8(2) Website
    - Krueger, A.O. 1996. Political Economy of Agricultural Policy Public Choice 87(1-2): 163-175. Article
    - Kennedy, P.L, H. Von Witzke, and T.L. Roe. 1996. Strategic Agricultural Trade Policy Interdependence and the Exchange Rate: A Game Theoretic Analysis Public Choice 88(1-2): 43-56. Article
  - Producer/Lobby Groups
    - Agriculture and Food Research Initiative (AFRI) Webpage
    - American Corn Growers Foundation Webpage
    - American Soybean Association Webpage
    - American Sugar Alliance Webpage, U.S. Sugar Policy Webpage
    - Cargill on the Issues Webpage
    - Farm Bureau Webpage, Farm Bill Webpage
    - National Cattlemen's Beef Association Webpage
    - National Corn Growers Association Webpage, Letters and Testimony Webpage
    - National Cotton Council Webpage, Government Programs Webpage
    - National Farmers Union Webpge,
    - ProPublica - Lobbying Arrangements in Agriculture Webpage
    - Renewable Fuels Association Webpage
    - Sweetener Users Association Webpage
  - U.S. Domestic Agricultural Support in the International Context Webpage
  - Overheads
- Targeting Farm Subsidies [Sept 4 – Section 1.7]
  - Overheads
  - Computational Economics — Lecture XXXI: Input-Output Analysis, Leontief and Impact Multipliers pdf Notes, Overheads
  - Computational Economics — Lecture XXXII: Input-Output Multipliers and IMPLAN pdf Notes, Overheads
- Rural Communities [Sept 4 – Section 1.8]
- Section 1 - Ten Questions
Agricultural Policy: Institutions and Rent Seeking Behavior
- Overview of the Policy Process in the United States and Current State of the 2018 Farm Bill [Sept 6 & 11 – Online Material]
- Agricultural Policy [Sept 13 – Section 2.1]
  - Overheads
  - United States v. Butler 401 (1936) Webpage
  - Wickard v. Filburn, 317 U.S. 111 (1942) Webpage
- Political Institutions [Sept 13 – Section 2.2]
  - Bellemare, M.F. and N. Carnes. 2015. Why Do Members of Congress Support Agricultural Protection? Food Policy 50: 20-34. ScienceDirect
  - Orden, D. and C. Zulauf. 2015. Political Economy of the 2014 Farm Bill. American Journal of Agricultural Economics 97(5): 1298-1311. Webpage
  - Heritage Foundation on Agriculture Webpage
  - American Enterprise Institute Webpage
  - American Farmland Trust Webpage
  - Farm Foundation Webpage, Ag Policy Blog
  - ThinkProgress Webpage, Farm Bill and the Environment
- Consequences of the Political Process [Sept 18 – Section 2.3]
  - Overheads
  - farmdocDaily -- University of Illinois Webpage
- Rationale for Government Intervention [Sept 18 – Section 2.4]
  - Blank, S.C. 2018. The Profit Problem of American Agricutlure: What We Have Learned with the Perspective of Time Choice 33(3) Webpage
  - Blank, S.C., K.W. Erickson, C.B. Moss, and R. Nehring. 2004. Agricultural Profits and Farm Household Wealth. American Journal of Agricultural Economics 86(5): 1299-1307. JSTOR
  - Blank, S.C., K.W. Erickson and C.B. Moss. 2005. Profit Patterns Across American Agriculture. Journal of Agricultural and Resource Economics 30(2): 205-230. JSTOR, AgEcon Search
  - Government Failure and Policy Uncertainty [Sept 18 – Section 2.5]
  - The Theory of Public Choice and Agricultural Policy [Sept 20 – Section 2.6]
    - Overheads I
    - Buchanan, J.M. and G. Tullock. 1999. The Calculus of Consent: Logical Foundations of Constitutional Democracy Indianapolis: Liberty Fund. pdf Book
    - Mitchell, W.C. 1989. The Calculus of Consent: Enduring Contributions to Public Choice. Public Choice 60(3): 201-201. JSTOR
    - Butler, E. 2018. Public Choice — A Primer London: Institute of Economic Affairs. Webpage
    - Overheads II
  - Rent-Seeking Behavior [Sept 20 – Section 2.7]
    - Overhead
  - Coalitions and Logrolling [Sept 25 – Section 2.8]
  - Farm Organization [Sept 25 – Section 2.9]
  - Section 2 - Ten Questions
- First Midterm 9/27
- Quantitative Tools
  - R-Project (Statistics) Webpage
    - Numerical Integration in R pdf Notes
  - wxMaxima (Mathematics) Webpage
  - Lectures in Quantitative Economics Webpage
  - GNU Octave Webpage
- Theoretical Considerations
  - A Review of Economic Equilibrium [Oct 2 – Online notes]
    - Overheads
  - Consumer Surplus [Oct 2 – Section Appendix 3B]
  - Producer Surplus [Oct 4 – Section Appendix 3C]
    - Overheads
  - Economic Efficiency and Income Distribution [Oct 4 – Section 3.1]
    - Zachary Grossman - University of California, Santa Barbara Overheads
    - Charles W. Upton - Kent State University Overheads
  - Income Transfers [Oct 11 – Section 3.2]
    - Overheads
  - The Harberger Tax and Monopoly Power [Oct 11 – Section 3.3]
  - Efficiency of Income Transfers [Oct 16 – Section 3.4]
    - Overheads
  - The Theory of Regulation [Oct 16 – Section 3.5]
    - Stigler, G.J. 1971. The Theory of Economic Regulation Bell Journal of Economics and Management Science 2(1): 3-21. JSTOR
    - Beneke, R.R. 1998. T.W. Schultz and Pamphlet No. 5: The Oleo Margerine War and Academic Freedom. Choices 4(Second Quarter): 4 - 8 AgEcon Search
    - Paarlberg, D. 1994. Economic Pathologies, Six Cases. Choice 9(3): 17-21. AgEcon Search
  - Section 3 - Ten Questions , Rice Spreadsheet Excel
  - Assignment 2 - Excel
- Agricultural Trade and Macroeconomic Policies
  - Agricultural Trade [Oct 18 – Section 4.1]
    - Overheads
  - International Trade Theory [Oct 18 – Section 4.2]
  - Trade Policy Instruments [Oct 23 – Section 4.3]
    - Overheads
  - Trade Distortions Caused by Market Power [Oct 23 – Section 4.4]
    - Overheads
  - Macroeconomics and Agricultural Policy [Oct 25 – Appendix 4B]
    - Overheads
    - Moose Jaw - Farming for Profit - Presentation (2015) PowerPoint
  - Macroeconomics, Trade, and Exchange Rates [Oct 25 – Section 4.5]
  - Section 4 - Ten Questions
- Second Midterm 11/1
- U.S. Agricultural Policy, Past Present and Future
  - Early U.S. Farm Bills [Oct 30 – Sections 5.3-5.7]
    - Overheads
  - Farm Bill of 2013 & 2018 [Nov 6]
    - Overheads
  - Changing to Risk Based Agricultural Policies [Nov 6]
    - Overheads
  - Crop Insurance in the United States [Nov 8 - 13, Sections 8.1-8.4]
    - Overheads -- Basic Crop Insurance
    - Overheads -- Incentives and Reinsurance
  - Theory and Failures of Crop Insurance [Nov 13, Sections 8.6-8.8]
    - Overheads
  - Section 5 - Ten Questions , Brown County Data
- Potpourri of Agricultural Policy Topics
  - Economics of Biofuels [Nov 15 & Nov 27, Chapter 12]
    - Overheads -- Volumetric Energy Excise Tax Credit
    - Tyner, Wallace E. 2007. Policy Alternatives for the Future of Biofuels Industry. Journal of Agricultural &' Food Industrial Organization 5(Article 2). Online
    - Schmitz, Andrew, Charles B. Moss, and Troy G. Schmitz. 2007. Ethanol: No Free Lunch. Journal of Agricultural & Food Industrial Organization 5(Article 3). Online
    - Gardner, Bruce. 2007. Fuel Ethanol Subsidies and Farm Price Support. Journal of Agricultural & Food Industrial Organization 5(Article 4). Online
    - Overheads -- Renewable Identification Numbers
    - McPhail, Lihong, Paul Westcott, and Heather Lutman. 2011. The Renewable Identification Number System an U.S. Biofuel Mandates. BIO-03, November 2011. Online
  - Agricultural Productivity and R & D Policy [Nov 27, Sections 11.1-11.5,11.7]
    - Overheads
  - Input Use and Changing Farm Structure [Nov 29, Sections 14.1-14.7]
    - Bureau of Relamation Webpage
    - W.C. Austin Project Webpage
    - Overheads
    - Moss, Charles B. and Andrew Schmitz. 2013. Positive and Negative Externalities in Agricultural Production: The Case of Adena Springs Ranch Journal of Agricultural and Applied Economics 45(3): 401-409. Webpage
  - Agricultural Policy and Farmland Prices [Dec 4, Sections 10.1-10.7]
  - Section 6 -Ten Questions
  - Assignment 5 Assignment, R Code
- Final December 13, 5:30 - 7:30pm
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