Most political analysts failed to predict that the election of 1980 would be close; few foresaw the landslide that would bring major changes in the policy-making machinery. The results surprised almost everyone. Ronald Reagan carried all but 6 states, and the Republicans won the Senate for the first time in a quarter century. The balance of power in the House of Representatives also shifted toward the conservatives—Republicans gained 33 seats.

The agricultural and food policy future now offers more than usual excitement—and also uncertainty. As the calendar turned, it ushered in a year of decision about the future of this nation's public policy concerning its agriculture production, farm family and rural community welfare, consumers' food supply, and agricultural trade. It also signaled the changing of the leading actors who will perform yet unwritten roles in a yet-to-be-titled drama of policy development. All of this will unfold both within an international and national environment of volatile economic forces. It offers all the challenge that a student of policy could expect.

Boehm and Spitze approach the assigned topic from quite different perspectives. Boehm's principal point of departure is his belief that the policy-making process has now changed to one of crisis reaction. That is, if a problem is not at the crisis stage, it is not acted on. From this premise, he moves on to identify several potential crises that he thinks will develop over the next several years.

The papers by Boehm and Spitze provide contrasts in approach, content, and conclusions. The Spitze paper reflects the issues as seen through the eyes of an observant professor located in a major Corn Belt university. Its ideas reflect sensitivity to articulation of policy problems confronting producers in the region. Boehm's paper is particularly strong in that it reflects the day-to-day sensitivity to the contemporary economic and political forces that currently affect the policy process. Both papers lack a clear sensitivity to the policy position and problems of southern agriculture.

From the early 1600s, when tobacco exports literally saved the struggling Jamestown settlement, to the January 4, 1980, embargo of grain to the Soviet Union, food and agriculture have played varied roles in international affairs of the U.S., that is, in the political, military, economic, and cultural exchanges that affect the power of the U.S. relative to other sovereign nations. Food donations have been used as a humanitarian gesture to avert starvation. Food export embargoes have been used as weapons against foreign adversaries and domestic scarcities. Food pledges have been used to promote international food aid conventions. Food import quotas have been reallocated to reward friendly nations and penalize unfriendly ones. U.S. food shipments have been used to feed Allied soldiers and to barter for strategic materials. Food exports have been used to bolster the domestic economy and strengthen the dollar.

The role of food and agriculture in world affairs is an extremely broad and multifaceted subject. Attempts to understand it require the contributions of a number of disciplines, such as agricultural economics, international trade and finance, history, and international politics. Therefore, it is virtually impossible to do it justice in a twelve-page manuscript or in a forty-minute presentation.

For a long time, the consensus of old farmers sitting around crossroads stores has been that, sooner or later, America is going to run out of agricultural land because of all the houses, shopping centers, and highways that are spreading out onto the nation's cropland. And for years, such observations have been summarily dismissed as the ravings of ignorant men with too much time on their hands. Yet in the last half of the 1970s, a significant part of the educated elite in the United States began to suspect that those old farmers just might be correct. The farm press began to run articles concerning the loss of prime agricultural land to urban sprawl (Johnson); some of the more prestigious national journals appealing to educated laymen began to publish articles on the subject (Blundell); and even general circulation newspapers that seldom deign to print anything other than stories on political corruption or murder and mayhem devoted space to feature-length articles warning of the loss of cropland to non-agricultural uses (Burnside).

Hite and Dillman have addressed an issue important to this country in their paper. This issue, our changing prime farmland resource base, has received much attention recently and is likely to receive more in the future. Although the views expressed in the Hite and Dillman article are both original and stimulating, they deserve further discussion. Following are comments on the basic premise of their paper, the role of positive economics in this issue, and potential implications for agricultural land retention in the South.

This paper identifies current and developing issues in interregional competition and agricultural transportation. These topics are related to the extent that the cost and quality of transportation services is one major determinant of the economic distance between regions.

Interregional competition analysis was introduced to agricultural economics in the late 1930s, with the stimulus of agricultural research funds authorized by the Bankhead-Jones Act of 1935, under the leadership of Sherman E. Johnson and John D. Black. Interregional competition developed as a synonym for regional comparative advantage. Interregional competition analysis is a general set of tools designed to measure regional comparative advantage.

Implicit in the subject of regional markets is the inference that they deserve more attention in research than they have been given in recent years. Based in large part on cheap energy for transportation and production, the economy has reflected increased regional specialization in production for a national (or international) market. Concurrently, there has been a disinter-mediation of many of the regional differences in consumer wants and preferences because of the increased mobility of the population and the exposure of all persons to the same mass communications material. These factors have contributed to an emphasis on the national market, in contrast to the regional market in both research and the popular press.

A comprehensive discussion of research and interregional competition logically includes three major components: (1) a review of the overall need for the research results and a clear delineation of the differences in information requirements across types of clientele; (2) a description of the characteristics of the needed research methodology, as related to the specific clientele needs; and (3) the resulting data requirements, consistent with both the methodology and with the research objectives. Furthermore, in addressing a research-oriented audience, there should be emphasis on identifying “bottlenecks” that currently exist either in developed methodology or data bases, or both. Of course, the idealistic objectives are to stimulate the assembled audience, first, to return home with an enthusiasm for developing new and more appropriate analytical methods; and, second, to begin lobbying for better and more extensive public data resources.

The spatial trend of manufacturing industry toward smaller towns and rural areas, particularly in the South and West, appears to be continuing into the 1980s (Haren, 1980). Economic research has been undertaken to examine the reasons for this national shift (Haren, 1970; Beale; Lonsdale et al.), the influence of community decisions on the location process (Smith et al.; Klindt et al.; Kuehn et al.), and various facets of industrial impact on rural communities (Summers et al.; Reinschmiedt and Jones; Deaton and Landes).

The beef cattle industry in the Southeast is dominated by the cow-calf enterprise. Considerable discussion and research has addressed the economic potential of producers in the Southeast carrying calves longer on pasture rather than shipping them to other regions for stockering and backgrounding. Some have suggested that the region has a comparative advantage for increased grain and grass finishing of animals (Farris and Dietrich). At the firm level, the decision to retain calves must be based, among other things, on the availability of forage and on current and expected prices. The longer calves are kept, the greater the competition between cows and calves for available forage.

Variability in commodity prices and yields, together with greater financial obligations for highly leveraged farms, have added much uncertainty about farmers' debt servicing capacity (Barry and Fraser; Hanson and Thompson). As a result, financial responses must come more to the forefront in farmers' risk management, through emphasis on fuller development and application of the financial control process; and development of specific financial programs and instruments for dealing with random variations in debt servicing capacity (Baker; Lee). An example of the second response is the variable amortization payment plan VAPP suggested by Baker and tested empirically by Stone for use in farm mortgage lending.

Income-expenditure relationships are important components in many economic models used to project food expenditure and to understand food-expenditure behavior. The empirical estimation of income-expenditure relations has concentrated on the effects of income in explaining the variations of the household food expenditure. However, the problem of structural or parametric homogeneity for Engel curves in the analysis of household food expenditure behavior has received less attention in the applied demand literature.

Various classes of models possess characteristics essential for commodity analysis. One class, input-output (I-O) models, can complement more widely used ommodity models, such as econometric and mathematical programming, which are often directed at a few specific production and use markets for the commodity under analysis. I-O models either formally linked with, or used independently of, these other models provide an analytical framework for examining macroeconomic adjustments to commodity market shocks. Further, I-O allows the tracing of resource flows to and from the commodity market and among all secondary markets. These characteristics suggest that a commodity-oriented I-O model ought to be a component of a package of models designed to provide complete coverage of a commodity for economic analysis.

Agricultural economists have long recognized pest populations as common property resources, and, as such, pest control through chemical pesticide application involves a tradeoff between increased crop yields and reduced environmental quality (Carlson; Regev et al.). Integrated pest management (IPM) attempts to minimize this tradeoff by substituting pest information and management skills for chemical pesticides. In part, IPM involves monitoring pest populations in order to utilize beneficial biological interactions. Weather patterns, stage of crop growth, and natural biological enemies of pests are among the factors included in IPM. In addition, entomologists have extended the integrated control concept to include selective rather than nonselective pesticide application that is applied only when pest populations exceed the “economic threshold” level (Hall and Norgaard). In an earlier economic analysis of IPM, Hall concluded that the major advantages of IPM are: (1) a substantial reduction in overall pesticide use, (2) no significant reduction in profits, (3) no significant loss of yields, (4) an overall reduction in pest management costs, and (5) a reduction in risk for the producers.

Cattlemen have expressed concern about wholesale beef and fed cattle pricing and have antitrust lawsuits pending against supermarkets, meatpackers, trade associations, and a meat price reporting firm. Lawsuits allege manipulation of wholesale carcass beef prices to artificially depress spot prices for fed cattle (General Accounting Office, 1977). Congressional and administrative investigations have focused on wholesale carcass beef pricing and price reporting and their effects on fed cattle pricing (Committee on Small Business, General Accounting Office, 1978; National Commission on Food Marketing; Packers and Stockyards Program, 1978). Cattlemen also have expressed dissatisfaction with live cattle futures markets before congressional and administrative committees, alleging that futures market prices adversely affect spot prices for fed cattle (Leuthold and Tomek; Meat Pricing Task Force). However, economists have not empirically studied the impacts of wholesale carcass beef and live cattle futures market prices in short-period pricing models for fed cattle, that is, impacts on individual transaction prices.

Agricultural economics occupies an unique position in most agriculture programs because it and rural sociology are the only social sciences among a broad array of plant, animal, and technical disciplines. As economic and technological changes have added to the complexity, of U.S. agriculture, the relative importance of agricultural economics has increased. The demand for individuals possessing knowledge of the technical aspects of agriculture and the ability to evaluate the social and economic ramifications of alternatives is increasing.

Cycles in beef cattle inventories and prices have been documented as far back as 1880 (Breimyer). The inability to identify optimal herd management strategies in response to fluctuating cattle prices is frequently blamed for the low historical returns received by cattle producers (Farris and Mallett). Cattle producers typically react to rising prices by increasing the size of their breeding herd and liquidating a portion of the herd when prices decline. Long lags between the time a cow is bred and the time her calf is weaned and ready for market make it difficult for cow-calf operators to make optimal long-run production plans. And because a cow has a long productive life, several years are required to evaluate the decision to invest in a larger breeding herd by adding more heifers. During this period, prices may fluctuate drastically, so that with hindsight, the decision to increase the investment in the herd may have been a poor choice. The same problem occurs when the herd is liquidated because of dim prospects of earning an immediate profit from the intact herd. The use of other resources probably does not fluctuate much over the cattle cycle. Bebout discovered that land committed to calf production remains fairly constant even in periods of low profits.