What you should have learned in Soc 325 (if you had been
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Transcript What you should have learned in Soc 325 (if you had been
What you should have
learned in Soc 325 (if you
had been paying attention)
Paul Lasley
Jolene Glenn
Tomoko Ogawa
Agriculture vs Agri CULTURE
One can not understand agriculture
and farming without understanding
the HISTORICAL content and basis of
agriculture development
One will not be able to successfully
farm in the future without attention to
the CULTURAL basis of farming and
rural life
What do we mean by
Cultural Basis of Farming
The human dimension of producers,
consumers and other stakeholders
–
–
–
–
–
–
Values and goals
Attitudes
Opinions
Lifestyle
World view
Recognition of differences among stakeholders—
Who are they and what are their expectations?
Course is presented in 3 periods
Historical—1607-1945
Current period 1945-2000
The Future 2000 and beyond
Agriculture vs Farming
They are not synonymous
Three sectors of agriculture
– Input or supply
– Farm sector
– Output or processing
What is a family farm and how
does it differ from other types
of farms?
Land ownership
Labor
Capital
Management
Residency
Dependency
Important values associated
with farming
Provided impetus for the great American
experiment in agrarian democracy
–
–
–
–
–
–
–
Competition
Opportunity
Way of life vs. business orientation
Family
Hard work is virtuous
Independence
Work with nature
Twin Pillars of Rural Culture
Structure of
Agriculture
Rural
Communities
Consumer
Preferences
Export
Policies
Structure
of
Agriculture
Foreign Defense
Global
Competiveness
Rural
Culture
Environmental
Community
Monetary
Policies
“Official” Definition
FARM -- according to U.S. Census of Agriculture
is any unit that has agricultural sales of $1,000
or more per year
M
i
l
l
i
o
n
6.8
1.9
1920
2002
Number of Iowa Farms
250
Thousands
211
208
206
190
200
154
150
124
115
97
100
50
0
1920
1930
1940
1954
1964
1974
1982
1992
Agricultural Census Data
Percent Farm Population,
1940–1990
50
Percent
40 36
30
30
25
20
24
20
18
14
13
10
10
9
5
2
0
1940
1950
1960
U.S.
1970
Iowa
1980
1990
Urban Population Rural Non-farm population
Farm Population
70%
40%
20%
2%
1880
1980
Urban Population
100 %
Farm Population
95 %
50 %
5%
1790
1860
1920
1980
Many decisions made in the Colonial
Period Shaped the Future of Agriculture
and Rural Life after Independence
Colonial Period 1607-1775
– What were some of those important
events?
Goal was to “get rich”, investors
Theocracy—religious freedom-Protestant work
ethic was imported
Ability or opportunity to get ahead
Labor scarcity contributed to large families,
indentured servants and slavery--1619
Early Colonial Experience
Export agriculture
Triangulation and mercantilism
Regional specialization
Exploitive, subsistence agriculture
Navigation Acts Colonial unrest
War of Independence
The early days of the
nation
Land Acquisition 380 million acres
Land Disposal
– Jefferson vs. Hamilton
– Liberalization of land
disposalHomestead Act 1862
– Land measurement
– Role of land speculators and squatters
Land Use
Abolished remnants of feudal pattern
Private ownership of land
– How land was used
Sold to raise capital for the gov’t
Incentive to enlistment in army
Used to support local schools
Financed Land Grant Universities
Early and Persistent Issues
Indian removal
Slavery (Missouri Compromise)
Access to markets
Infrastructure
Credit
Population Growth
1860 one-half of the adult males were
foreign born
Immigration doors kept open
– Labor for industrialization
– Abolishing slaverydrive to
mechanization
Technological Advance
Mold board plow 1837
Mechanical reaper
Corn planter
Grain drill
Steam engine- gasoline powered
tractors
Impacts of Technology
Reduced the demand for labor
Increased productivity
Farm size could expand
Developed of farm machinery sector
Increased capitalization
Reliance upon purchased inputs
Specialization in farming
Late Pioneer Period
Need for education became apparent
– Land Grant Universities
Morrill Act 1862
Hatch Act 1867
Smith Lever Act 1914
– Agricultural Societies
Local Fairs
The Last Frontier
1860 land west of the line from St Paul
to Fort Worth was largely unsettled
1860-1900
– 500 million acres were disposed of
80 million Homestead Act
108 million through auctions
300 million as grants to the railroads
1860 -- 407 million acres in farms
1900 -- 839 million acres in farms
F
a
5.5 million
r
m
s
1.9 million
1860
1900
Agriculture enters into a recession that
lasts until 1900
–between 1870 - 1880
population increased 26%
production rose 53%
meeting high land prices with
declining gross incomes
seeking out reasons for tough times
on the farms
–railroad rates, agribusiness
overproduction
plight in newly settled western states
Organize and act collectively
–Grange (Patrons of Husbandry)
regulate railroad
–Farmers Alliance cooperatives
–Populist Movement - William Jennings Bryan
–Farm Bureau—1911
–Farmers Holiday Movement--1932
Turn to government for assistance
–USDA - created in 1862
farmers sought relief by urging
government to...
–curb the power of monopolists
–create a flexible and liberal
monetary system
–reform the tax system
creates recognition for the need to address poverty in rural America
need for modernization
requires technology & science & education
sets the stage for modernization & development
– technology
– education
– business orientation
– cooperation
Reform
Movement
The BIG Picture
1897 - 1920 Prosperity
1920 - 1933 Depression
Important Trends
Urbanization
Mechanization
Reliance upon purchased inputs
Economic instability
Important Iowans
Milo Reno
Tama Jim Wilson
Henry Wallace
Herbert Hoover
George Washington Carver
Charles Hart and Charles Parr
Orlan Staley
Tom Vilsack
Important Dates
1607 founding of Jamestown
July 4, 1776 Declaration of
Independence
1862
– USDA, Morrill Act, Homestead Act
1908 Country Life Commission
1910-1914 Golden Age of Agriculture
1897 – 1933 The Beginning of
Scientific Agriculture
3 Essential Components
1) The discovery of scientific relationships
2) The development of new technologies
based upon these scientific relationships
3) The adoption of new technologies on
farms
The Ups and Downs of the
Farm Economy
1865
Civil
War
ends
1897
1918 1920
1940-1945
1929-1932 WWII
WWI
Great
Depression
The Technology Revolution
1933 - 1970
Great Depression 1929 - 1932
organized
sought government intervention
adopted new technologies
Technological
Revolutions
1) Mechanical 1890 - 1940
2) Petro-chemical 1945 - 1980
3) Bio-genetic 1980
4) Managerial 1980
Four Revolutions in Farming
1. Mechanical 1890-1940
•
•
Machine Age/Mechanization
Replacing animals and labor with
machines
Fig. 3
Four Revolutions in
Farming
2. Petro-Chemical (1950-1980)
•
•
•
•
Energy intensification, fertilizers,
pesticides, reliance upon fossil fuels
Genetic improvements
Hybrids
Vaccines
Fig. 4
Four Revolutions in Farming
3. Bio-Genetic (1980 )
•
Recombinant DNA—New
species and varieties
Herbicide tolerant crops
BST, BGH
Hybrids-Designer commodities
New Uses of existing products
•
Biological control of diseases and
pathogens
2004—200 million acres of genetically
engineered crops, up 20% from 2003
•
Fig. 5
Four Revolutions in Farming
4. Managerial Revolution
•
•
•
•
Information Age
Managing complex, integrated systems
Globalization
Importance of human resources
• Personnel Management
• Marketing
• R &D
• Communications
Fig. 6
Millions of Farms
6.8
2.0
1865
Period of Great Farm Building
essential factors
land
credit
technology
markets
transportation
physical infrastructure
social infrastructure
1920
1992
Period of Great Farm Decline
Industrial
Petro-chemical
Bio-genetic &
Managerial
Labor Declines
– 1940 - 50
26%
– 1950 - 60
35%
– 1960 - 70
39%
Purchased Inputs (% increase from 1933 - 70)
– Machinery 212%
– Chemicals 1800%
– Feed/Seed 270%
WWII -- “the miracle that farm people
were waiting for” (Cochrane p. 124)
Impacts of WWII
1940 - 46 farm prices up 138%
gross farm income up 167%
net income up 236%
12 years of prosperity
•massive rural to urban migration
•farm population down 35% in 14 years (1939 - 53)
•women entered the off-farm work force
Trends in the structure of agriculture
•
•
•
•
•
Farm consolidation
Larger farms
Decline in farm numbers
Specialization in production
Movement from general farms to very
specialized farm types
Fig. 1
Consequences
•
•
•
Loss of farm population (out migration)
Rural neighborhoods vacant during the day,
owing to larger numbers of part-time farms
Aging of farm population
• Fewer opportunities for beginning farmers
• Technology enables farmers to continue farming
longer
•
Increase in rural nonfarm residences and
land speculators and investors
Fig. 3
Consequences
•
•
•
•
•
Vulnerabilities of specialization
Less labor needed
More capitalization of existing farms
Increased efficiencies resulting in chronic
surpluses of feedstocks
Government program costs to support farm
incomehigher land values
Fig. 2
Enhanced income spurred adoption of new
technologies
– many technologies that substituted machinery
for human and animals
– Henry A. Wallace/ISU--hybrid seeds
Farm consolidation
– farm numbers decreased/farm size increased
net output increases because of more
efficiency
chronic excess capacity
Responses to rural poverty
Ignore/deny problem and minimize its impact
Blame is a collective character flaws
Blame the victim
Emphasize development
– Community
– Rural
– Economic
Responses
Agriculture support programs and policies
– Target prices
– Deficiency payments
– Income payments
Welfare programs
– Food stamps
– Unemployment benefits
– ADC
Push for improved efficiency and productivity
– Drive for industrialization
Poverty and Industrialization
In a response to declining or stagnate conditions
agriculturalist turned to industrialism emphasizing
productivity, efficiency, and outputs (Yields)
Implication of Industrialization
–
–
–
–
–
Increase use of purchased (off-farm) goods
Increase capital inputs
Decrease labor requirements
Increase use of Technology
Increase outputs (and therefore surpluses)
1.
2.
3.
Decline in labor
– Technology
– Capital intensification
Completive Losses
– Some farmers are ill-equipped to handle change or
new complexities
– Unable to respond well enough to upturns in
economy
Discrimination or the residual in rural areas
– American Indians
– Blacks
Stages of Adoption
Awareness—discovering the existence of a
new idea or product
Interest—systematic gathering of
information about it, how does it work, what
does it cost
Evaluation—putting innovation through a
mental trial, trying it out in their mind
Trial—Trying the product or technology
Adoption—final decision to accept or reject
Sources of Information
Awareness— mass media, newspaper,
magazines, radio, TV
Interest (information gathering)—
commercial firms, friends, neighbors,
dealers
Evaluation– friends, neighbors, dealers
People Differ in Speed of
Adoption
Innovators
Early Adopters
Early Majority
Late Majority
Laggards
Non-adopters
2.5%
13.5%
34.0%
34.0%
13.5%
2.5%
Innovators
2.5%
Early
Adopters
13.5%
Early
Majority
34%
Late
Majority
34%
Laggards
13.5%
Nonadopters
2.5%
Changes in Agriculture
Decline in farm numbers
Increased farm size
Fewer medium-sized farms
More “hobby” farms
Off-farm income up
Farm dependence down
Changes in Rural
Communities
Population mix change
Commuting
Lifestyle choices
Linkages to urban places
Changes in Rural
Communities
Population shifts have been a constant
– Decline in farm population, migration to urban
areas for employment
– Return from urban to rural areas for amenities
Since 2000, population decline in 76 of 99 counties
IFPRL ’08: Farmers lived in current community: average
of 50 years
30% lived in community whole life, 60% more than
75% of their lives
What is ethics anyway?
Standards of conduct
Standards that indicate how one should
behave based upon moral duties and virtues
Principals of right and wrong
As a practical matter, ethics is about how we
meet the challenge of doing the right thing
when that will cost more than we want to pay.
Aspects of Ethics
Ability to discern right from wrong,
good and evil, propriety from
impropriety
Commitment to do what is right,
proper and good. Ethics entails action
not just thoughts
What is meant by ethics?
Helps us discern what is right or
wrong
Doing what the law requires
Standards of behavior
Doing what society expects
Standards of right and wrong that
prescribe what people ought to do in
terms of rights, benefits to society,
fairness, etc
Standards of behavior that tell us how
people ought to act in many situations
in which they find themselves in
Utilitarian Approach
The Rights Approach
Fairness or Justice
Common Good
Virtue
Four simple questions
1.
2.
3.
4.
Could you or someone else suffer physical
harm?
Could you or someone else suffer
emotional pain?
Could the decision hurt your reputation,
undermine your credibility, or damage
important relationships?
Could the decision impede the
achievement of any important goal?
Seven Steps to Better
Decisions
1.
2.
3.
4.
5.
6.
7.
Stop and think
Clarify goals
Determine Facts
Develop options
Consider consequences
Choose
Monitor and modify
What happens when there is not
adherence to a code of ethics?
People begin to “cut corners”
– Most unethical and illegal activities start small
Rationale or justifications often include,
“everyone else is doing it”
Erosion in ethics brings about greater
regulation because trust has been violated
Rules, regulations and laws reflect the
formalization of ethics
Causes of the farm crisis in the
later 1980s
Flawed government policy
World expansion of grain
Overly optimistic projections
Favorable global weather
Food self sufficient
Increased global competition
Need to make the distinction between “Farm
Crisis” and “Long-term Chronic Problem”
This was a restructuring process
– Broader than farming
– Painful—Difficult
– Transitions are hard
Community Impacts of
Economic Hardship in Farming
Economic
What does it mean for the financial
well-being of the community?
Social
What does it mean for the social fabric
of the community?
Responses to economic hardship
1.
2.
3.
4.
5.
Cut back on living expenses
Earn more money, attempt to generate
more income
Dip into savings
Borrow and use credit
Withdraw from social activities
Social or Community Impacts
Fewer farms translates to fewer farm families
– consolidation of rural organizations and
institutions, e.g., schools and churches
– revenue declines among businesses that serve
the needs of farm families
Multiple job holding
– more part-time farming
less time for community activities
Are the current problems a
commodity price problem
or a farm income problem?
Making the Distinction Between
Personal Problems and Social Problems
When one farmer has financial
problems, we can conclude that this is
a personal problem.
When an entire group or class of
individuals have financial problems,
we should conclude that this is a
social problem.
The prescription for the farm ills during the past
70 years was to emphasize individual adoption
of new technology with little or no regard to
implications for farmers as a group.
Those who failed to accept this prescription
were labeled as social deviants
Laggards
Luddites
Romantics
Radicals
Consumerism
Tree-huggers
Environmental wackos
Production
Costs
Attempts to
Decrease
Sustainable
Farming
IPM, ICM, BMP
Commodity
Prices
Attempts to Increase
Futures, Hedges,
Options
Cooperative Action
Maybe focus should be on developing
a new food system rather than trying
to preserve an obsolete and
antiquated commodity system.
Characteristics of the Old Commodity System
Production of homogenous bulk commodities
Standardized production systems
Focus on volume, scale, size, and efficiency
Large scale production, transportation and
processing
Impersonal and indifferent to individual needs and
niches
Food viewed as fuel
Sharp distinction between producers and
consumers
Product was produced and then sold through some
market structure that may or may not be regulated
and fair to all parties
Buyers and sellers are adversaries—each looking
out for their best interests
Focus was on individual whether it be a person,
farm, or firm
Emerging Characteristics of a New Food
System
Designer commodities, crops grown for specific end
uses
Explosion of new crops and products resulting from
biotechnology
Emphasis on batches, small niches
Focus on food safety and quality
Food shopping and eating as a social experience
Linkages between producers and consumers
Crops grown under contract to meet
expectations of buyer
Product is specified, terms negotiated,
produce is grown, and then delivered
Buyers and sellers are partners
Focus on group, network, coalition
Why are transitions hard?
Social and economic change are not neutral
processes
– They produce gains for some and losses
for others
– How to cope with losses
Losses include
Decline in financial security
Loss of status
Stigma/Labeling
Separation/Identity
Feelings of unfairness
Guilt—self-blame
Feeling of inadequacy
Number of Hours per Acre for Corn and Soybeans
35
30
25
20
15
10
5
0
1919
1929
1939
1949
Corn
1959
1969
1979
Soybeans
1986
1996
Number of Hours per 100 Bushels of Corn and Soybeans
160
140
120
100
80
60
40
20
0
1919
1929
1939
1949
Corn
1959
1969
1979
Soybeans
1982
1998
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
1958
1956
1954
1952
1950
Farm Share of Total Food Bill
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
Iowa Average Land Values
$4,500
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
Distribution of Farms and Sales in the U.S., 2007
60%
50%
40%
30%
20%
10%
0%
< $1000
$1,0002,499
$2,5004,999
$5,0009,999
$10,00024,999
% of Farms
$25,00049,999
$50,00099,999
$100249,999
$250499,999
% of Sales
$500999,999
>$1M
5 Percent of the U.S. farms (116,286)
accounted for 74 percent of the total
U.S. agricultural sales in 2007
19 percent of our total food bill is farm
value
Distribution of Iowa Farms by Typology, 2007
35%
30%
25%
20%
15%
10%
5%
0%
Limited
Res.
Retirement
Lifestyle
Sm. Low
sale
Sm. High
Sale
Large
family
Very Lg.
Family
Non-family
19
00
19
10
19
20
19
25
19
30
19
35
19
40
19
45
19
50
19
54
19
59
19
64
19
69
19
74
19
78
19
82
19
87
19
92
19
97
20
02
20
07
Percent of Farmland Rented in the U.S.
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Percent of Iowa Farmland Rented
60%
50%
40%
30%
20%
10%
0%
1900
1910
1920
1925
1930
1935
1940
1945
1950
1992
1997
2002
2007
19
10
19
20
19
25
19
30
19
35
19
40
19
45
19
50
19
54
19
59
19
64
19
69
19
74
19
82
19
87
19
92
19
97
20
02
20
07
Percent of Full Owner Farms
80%
70%
60%
50%
40%
30%
20%
10%
0%
Iowa
U.S.
Can agriculture progress positively from its current point?
Will it simply continue at a status quo?
Is the only direction we go from here a negative one?
Future
Iowa is moving towards more dispersed land
ownership and more concentrated land
management.
Iowa will continue to see more farmers owning
part of their land and renting the rest
There will be an increase in cash rents
There will continue to be more people who own
land that do not live in the State.
Factors to Watch
We are entering into a period of major uncertainty.
How the current financial situation will play out no
one knows for sure.
Land values will move with higher income and
anticipation; uncertain where they will go
What will the next generation of landowners do with
the land
When will we recognize other costs in our production
and distribution systems
“We must get better, not bigger.”
Bioeconomy
Biofuels have the potential to
“transform agriculture more profoundly
than any development since the green
revolution” and help resolve some of
the world’s most intractable problems
related to energy.”
(Worldwatch Institute, 2006: xix)
The Claims
Proponents argue
1.
2.
Deliver energy independence
Revitalize rural communities
–
Biomass production & biofuel refineries
New source of farm & community income,
employment, investment
The Claims
3.
Curtail global warming
–
Reduce greenhouse
gas emissions (GHG)
Biofuels & gasoline produce CO2
Biomass (i.e. corn) absorb CO2 while growing
– Net reduction in GHG
A. Conservation Reserve Program (CRP)
Largest government conservation program
– 1985 Farm Bill
Environmental goal
– Curtail soil erosion, improve water quality, provide wildlife
habitat
– Take “at risk” land out of production
– Keep it/convert it to grass, trees, soil-conserving covers
Farmers receive annual payment for enrolling
environmentally at risk land
Decade-long contracts
A. Conservation Reserve
Program (CRP)
Program peaked 2007
–
–
–
–
–
400,000 farmers enrolled
receiving ~ $1.8 billion
~37 million acres (>8% of cropland in the country).
land mass bigger than New York state
Iowa = 1.9 million acres enrolled
B. The “Dead Zone”
2008: dead zone 7,988 sq. mi (size of
Massachusetts)
– second largest in history
Directly linked to ethanol production
– If farmers produce enough corn to meet goal of 15 bg of
ethanol, nitrogen runoff into Gulf would increase 10%
– Efforts to shrink dead zone “practically impossible"
C. Deforestation
Expansion of biofuel production = deforestation
– Brazil (Amazon, Cerrado), Indonesia, Malaysia
Aug 2007-Aug 2008 Amazon deforestation up 69%
–
–
–
–
5,000 sq miles
Loss of biologically rich ecosystems
Loss of fragile wildlife habitats
Increase in carbon emissions
global warming
End of the Ethanol Boom?
End 2008 – a perfect storm
Global economic crisis, financial credit crisis
Decline in gasoline consumption
Oil, gasoline prices plunged
Corn prices remain relatively high
End of the Boom?
Bankruptcy and plant closures
– ~10 companies closed 24 plants
– dozen more companies in distress
– idled ~2 billion gallons annual production
capacity
– industry not expected to meet government
production targets
– Solution?
Industry demanding increases to blend limit
(currently 10%)
Conclusion
Must consider social, economic, environmental
consequences of alternative energy
Ethanol cannot resolve problems of growing
demand for energy, oil dependency, and global
warming
What alternatives?
– Conservation?
– Cellulosic? Wind? Solar?
ENTREPRENEUR
CHARACTERISTICS
Desire for independence
Recognizes business opportunities
Willingness to take calculated risks
Ability to function in an uncertain
environment
SURVIVAL FARMER
ENTREPRENEURS
Struggle to achieve success, but may lack
skills or resources to recognize or capitalize
on opportunities
Forced into entrepreneurship because they
operate marginally profitable farms and need
additional income
Lack of other employment opportunities or
unwillingness to work for someone else
makes creating a new business a reasonable
alternative
LIFESTYLE FARMER
ENTREPRENEURS
Operate profitable farms and have surplus
resources such as time, knowledge, skills, and
money for which they seek investment
opportunities
Have modest goals for growth and income
because the business exists primarily to provide
extra financial resources to enhance a way of life
Although the entrepreneur’s interest for the
business may not be expansive growth, it
provides the community with economic benefits
through the creation of some jobs and income
HIGH-GROWTH VENTURE FARMER
ENTREPRENEURS
Operate profitable farms and have surplus resources
such as time, knowledge, skills, and money for which
they seek investment opportunities
Ventures create new wealth by developing new
products, production processes, and/or markets
(Schumpeter)
Desire significant growth that may tap national and
international markets and require the development or
construction of substantial new physical infrastructure
Leads to considerable economic activity in jobs and
income with the potential of ancillary business
establishment and growth
Why should society be concerned
about the structure of local
business?
Population retention and quality of life
reflects opportunities
The life blood of many of Iowa’s 839
rural communities depends upon
farming and rural population
The viability of social institutions
depends upon opportunity structure
Challenges for
Iowa’s Agriculture
Fewer farmers, particularly mid-size
operators
Economic deterioration of rural
communities
Strong dependence on purchased inputs
and subsidy payments
Degradation of water resources
Federal Agricultural Payments
to Iowa, 1995-2006
Farming subsidies
$13.5 billion (84%)
Conservation programs
$2.3 billion (14%)
Disaster payments
$0.2 billion (2%)
Total
$16.0 billion
Source: Environmental Working Group, http//:www.ewg.org
How Could
Iowa’s Agriculture Thrive?
Diversification of cropping systems, especially
with perennial species
(Re) Integration of crop and livestock systems
Strategic use of conservation practices
(‘targeting’)
Perennial vegetation:
•Builds and conserves soil
•Captures and stores carbon
•Holds and recycles nutrients efficiently
•Retains and filters water
•Provides wildlife habitat
•Assists in regulating certain pests
Photo courtesy of J. Neal,
Leopold Center
Can diversified cropping systems
reduce reliance on agrichemicals and
fossil fuels, while maintaining or
improving productivity,
environmental quality, and
profitability?
Yields and economic returns from certain
low-external-input (LEI) systems can match or
exceed those from conventional systems, under
conditions of high production potential.
Policies should promote
compensation of farmers for:
Soil, water, and wildlife conservation
Carbon storage
Biofuel feedstock production
Food and feed production
Business Success is Dependent upon:
Understanding the large scale social
and economic forces
Positioning oneself to take advantage
of the opportunities that lie ahead
Learning to read the market
Willingness and ability to change
A major challenge of the future
Ability and willingness to change to
new opportunities
Accepting change is not easy
Thus we often ignore market
information and miss opportunities
Hard work is not sufficient--failure to
respond to market signals
Important Trends and Forces
Influencing Agriculture
1.
2.
3.
4.
5.
6.
Re-assertion of Cultural Values and Beliefs
Economic Restructuring
Population Shifts and Dynamics
Population growth reflects opportunities
Occupational changes
Personal safety is becoming more important
+0.5 +12.4
19902000
+8.5
+9.6
+8.4 +5.4
+8.6
+8.5 +9.3
Business Success is Dependent upon:
Understanding the large scale social
and economic forces
Positioning oneself to take advantage
of the opportunities that lie ahead
Learning to read the market
Willingness and ability to change
A major challenge of the future
Ability and willingness to change to
new opportunities
Accepting change is not easy
Thus we often ignore market
information and miss opportunities
Hard work is not sufficient--failure to
respond to market signals
Consumer Driven Agriculture
Aging baby boomers, those born between
1946-64 will approach 54 million by 2020
Market growth and potential for older
population, less active, higher standard of
living
More expensive cuts of meat, exotic
vegetables, luxury food items, ready to eat,
higher priced restaurants, etc.
Consumer Driven Agriculture
Per capita income growth is projected to be
about 1% annually between 2000-2020,
compared with 1.2% that occurred between
1988-98
Key question is how much of this higher
disposable income will be spent on food and
what types of food will be demanded
Consumer Driven Agriculture
Projections are:
More fruit, vegetables, fish, poultry,
cheese, yogurt and prepared foods
More eating out
More attention to diets, health and
wellness
Consumer Driven Agriculture
Population projections
Hispanics
Asians
Whites
Blacks
2002
12.6%
3.9%
71.0%
12.0%
2020
18%
5.0%
64.0%
13.0%
U.S. population stands at 281 million and by
2020 will grow to about 331-361 million (50-80
million).
Risk Communication: Recreancy
The solution might lie in the recreancy theorem, which
asserts that public trust in societal institutions reflects
assessments of the competence and fiduciary
responsibilities of institutional actors.
Where Competence refers to perceptions of expertise
and skill, and Fiduciary Responsibility refers to
perceptions that the source will behave with in the
“right” way (ethically).
Fiduciary Responsibility can also be called Confidence.
Risk Communication:
Recreancy
Our theoretical model can be diagrammed like
this:
Competence
Trust
Compliance
Confidence
Where Compliance refers to willingness to heed
the recommendations of others. This variable is
used to evaluate the external validity of the
measure of trust, as an indicator of commitment
to a source of information.
The W.W. Kellogg Foundation named the movement
and brought in health movements and the farmer
worker movements
Healthy
Green
Fair (to farmers and farm
workers)
Affordable
Local was added by other
movement actors, influenced by
Smart Growth movement
Community-based economy movement
Anti-globalization movement
Climate change concerns
Forms of Capital
Natural
Cultural
Human
Social
Political
Financial
Built
To be successful…you need to:
Figure out how you can become the low
cost producer against everyone who is
producing the same products as you.
OR
Figure out a niche where there is limited
or no competition…where you offer a
superior, highly differentiated product.
Consequences of these
trends
Farm consolidation
Specialization in production
Movement from general farms
producing a wide variety of crops and
livestock to one or two commodities
Vulnerabilities of specialization
Fluctuations and increased risk
Secondary Consequences
Decline in farm numbers
Larger farms
More capitalization of existing farms
Aging of farm population
– Fewer opportunities for beginning farmers
– Technology enables farmers to continue
farming longer
What are Farmers Predicting for the
Next 10 years (1999-09)?
99% likely that farm number will
continue to decline
95% low farm prices will put many out
of business
96% more reliance on off-farm income
82% cost of living will prevent many
from retiring at age 65
Directions in Economic
Development
(2001 Farm Poll)
67%… tax incentives for employers who
hire Iowa graduates
69%… emphasize production agriculture
and
related industries
76%… raising wages is needed to attract
and retain people
67%… emphasize main street development