It is a privilege and pleasure to have the opportunity to present the inaugural presidential address of the Southern Agricultural Economics Association (SAEA). As I considered alternative topics which might be candidates for this presidential address, an intriguing question kept attracting my attention. Why are there regional agricultural economics associations and in particular why is there a Southern Agricultural Economics Association? What services does the SAEA provide to its membership that a national association such as the American Agricultural Economics Association does not provide? Or possibly it is not what services a regional association provides but how and in what kind of an environment the services are provided to members.

The effects of agricultural research and extension expenditures on productivity in the United States are estimated during the period 1949-81 using data for ten production regions. The large time-series cross-sectional data base allows the translog production function to be estimated directly. Results from the translog and Cobb-Douglas production functions are compared. The results indicate that use of the Cobb-Douglas production function would overestimate the internal rate of return of agricultural research and extension expenditures in the United States and eight production regions. The total marginal product and internal rate of return for the United States are $8.11 and 66 percent, respectively.

Some believe Panama Canal toll rates will increase dramatically as Panama's sovereignty over the Canal becomes complete at the end of this century. This paper focuses on the ability of Panama Canal management to extract additional toll revenues from United States grain traversing the Canal and the impact of increased toll rates on export grain flows. Analyses show toll rates established by a revenue-maximizing Canal management would exceed historical and current rates. A monopolizing Canal operator would have moderately increased Pacific port exports in the mid-1970's; whereas, in the 1979-82 period, Pacific port flows would have exceeded historical level.

The following definition of biotechnology goes beyond the rather limiting concept of genetic engineering. Biotechnology is defined simply as those biological means used to develop processes and products employing organisms or their components.

This paper is concerned with analysis of economic feasibility of solar energy systems. Methodology for estimating energy output from different sized systems is briefly presented, and this is used to determine technical coefficients for a mixed integer model which optimizes the size of the solar heating unit for a particular use. An empirical example of hot water heating on a Georgia dairy is presented. Cost curves are provided for the dairy example to illustrate the effect of sizing on the economic feasibility of solar heating and to elucidate the structure of the optimal sizing decision.

Net present value analysis is used to derive the marginal bid price for a beef herd sire from after-tax net revenues and cash flow influenced by genetic improvements. Marginal bid price represents the additional amount a producer could pay, above the present value of the current beef herd sire, for a sire expected to exhibit superior performance as reflected by increased average weaning weights of offspring.

An analysis of the profitability of purchasing a breeding bull for a commercial beef cow herd is presented as an application. Several alternative scenarios illustrate the impact of selected determinants on the marginal bid price of a bull.

Adoption of computerized decision analysis and computerized communications technology in many agricultural production and marketing situations will occur rapidly in the next decade. Computer hardware, such as microcomputers and large central processors, has become more reliable while costs have declined dramatically. Coupled with this has been the escalating costs of people and product transportation.

Forage production variability is incorporated into a decision theory framework for a beef producer in East Texas. The results suggest that the least risky, and also the most profitable, approach to intensive forage beef production is to plan for relatively poor weather conditions and low forage production. This results in a more diverse forage system and a smaller herd size than would be found optimal under the assumption of constant average forage production. These results also demonstrate that the assumption of constant average forage production may result in grossly exaggerated estimates of expected net returns.

The cornerstone of the 1977 and 1981 Farm Bills for crops is a buffer stock-supply management program involving the farmer-owned reserve and acreage adjustment instruments. Among the several reasons normally cited for adopting this type program is price and income stability. However, recent swings in commodity prices, net farm income and government program costs have stimulated widespread interest in farm program redesign and modification in 1985.

This study compares equivalent annual rents for two alternative land uses in a region where farming and timber plantations coexist. The comparison is motivated by the possibility that rising timber prices may stimulate timber processors to compete for farmland. Prices, costs, and market rents are assumed to first follow existing trends and then to reach steady state values. Market rents are projected and capitalized for agriculture. Internal soil rents are capitalized for timber. The results show timber to have a comparative advantage on high fertility sites and suggest that timber might become a competitive land use at the intensive margin of the region's farmland base.

Results indicate that productivity growth has been a prime factor in Florida's ability to retain a competitive position in the United States domestic fresh winter vegetable market. Total factor productivity indexes and productivity growth rates are estimated for the production of four major vegetable crops in one or more of four production areas in Florida. Florida producers have exhibited substantial productivity growth over the 1969-70 to 1981-82 period.

Rural development research and extension activities directly impact approximately 100 million U.S. farm and nonfarm residents; whereas, commercial agricultural programs directly impact about 6 million farm residents (U.S. Department of Commerce, b). Based on this fact, it is difficult to understand why rural development research and extension programs are often listed last when priorities for funding are discussed.

Interest has grown in analyzing the impact of national imports of foreign beef on state agricultural sectors. In this study, an interfaced Hawaiian-national model is simulated for a change in national beef imports. Hawaiian and national impacts demonstrate wide variation in both sign and magnitude. Usefulness of state models is emphasized for situations where state impacts of national policies are of interest.

Irrigation water is produced within the irrigation subprocess of a farm. Water supply is identified for effective field water, which sets the upper bound on water available for plant use. Georgescu-Roegen process analysis concepts are merged with the neoclassical theory of cost as the underlying framework. The approach is illustrated for a permanent overhead system used in a Florida citrus grove. The marginal cost for the 2.54 centimeters application depth dominates all other depths for the higher water levels. Process analysis is an important analytical tool for increasing understanding of the features of irrigation water supply.

Prior to the last decade, federal water-project construction programs dominated water policy. These programs continue, but at a reduced level of funding, and the nation now is denning a new agenda of water resources issues to include water quality management and water allocation. Economists engaged in studies of water resources policy, and who seek to influence the direction of policy through research, teaching, and extension will find these exciting times.

The purpose of this study was to develop a procedure for estimating future rail traffic that considers the relationship between the structure of a state's economy and rail freight traffic. The study expands the use of input-output models to include the forecasting of transportation demand. Georgia and Michigan case studies were used to test the forecasting capability of the input-output procedure. For Michigan's 1980 rail movements, the model predicted rail traffic to within 0.15 percent of actual traffic. For 1979 Georgia traffic, the model predicted within 4.3 percent of actual traffic. Various statistical tests indicate that the procedure was effective in forecasting rail freight traffic.