Transcript 1. U.S. Ag Policy & How it Works

1.
AGRICULTURAL PUBLIC
POLICY
& HOW IT WORKS IN U.S.
Larry D. Sanders
Fall 2005
Dept. of Ag Economics
Oklahoma State University
Introduction

Purpose: gain an awareness of ag public
policy & the process of policy
development
 Content Learning Objectives:
1. Define agricultural public policy
2. Understand the process of policy
development & implementation
3. Understand the underlying philosophies
of policy formation
2
Introduction--continued

Process Learning Objectives; develop
skills of:
1. Critical Thinking
2. Written & Verbal Communication
3. Problem Solving
4. Teamwork
3
Lecture
The process by which an idea is
transcribed from the notes of the
teacher to the notes of the student
without going through the mind of either
4
“Anxiety Test”

“The ultimate test of a set of economic ideas.
. . is whether it illuminates the anxieties of
the time. Does it explain problems that
people find urgent? Does it bear on the
current criticism of economic performance?
. . . Does it bear upon the issues of political
debate? For these, though many have
always preferred to believe otherwise, do not
ignite spontaneously or emerge maliciously
from the mouths of agitators to afflict the
comfortable.”
--John Kenneth Galbraith, Economics & the Public
Purpose, 1973 [bold italics added by instructor]
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What is agricultural public
policy?
 Policy
Definition
 Determinants of Policy Position
 Agricultural Policy Objectives
 Policy Process
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Policy Definition

Class
 Knutson:
 Policy: guiding principle leading to a course of
action or specific program that is pursued by
the government
 Ag/food policy: embody principles that guide
govt. programs in production, resources
utilized in production, domestic & int’l markets
for commodities & food products, food
consumption, & rural America conditions.
 Working definition:
 “Whatever government chooses to do or not
do”
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Policy Determinants

Facts: what is
 Beliefs: what people think
 Values: what should be
 Myths: widely shared “stories” about how
society ought to be organized
 Goals: desired results
 Examples
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TWO WORMS
US Agricultural Policy
Objectives

Protect farmers from market instability
 Maintain adequate food supply at
reasonable prices
 Encourage agricultural exports to pay for
US growth in productivity:
 Industrialization
 Imports
 Economic Growth
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Policy Process

Kings & Kingmakers
 Power Clusters
 Hahn’s Model
 How a bill becomes law
 Role of Government
 Iron Triangle
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Kings and Kingmakers Model
KingMakers
Kings
Actives
Interested Citizens
Apathetic Citizens
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Role of Government
(Evolving Process)
1. Economy: Purpose is provisioning of
society
2. 1930s: Economic poor health
3. Keynes: More govt. necessary to
counter “shortrun” market problems
“In the long run, market will stabilize.
But in the long run, we’ll all be dead.”
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Role of Government (cont.)
4. FDR: Relief, Reform, Recovery
--Dramatic increase in government
intervention
5. 1940s: WWII supported Keynes’ claim
--Employment Act of 1946
6. 1960s: Heller--”Ability to fine-tune
economy within sight.”
--BUT fighting 2 wars (Poverty & Vietnam)
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Role of Government (cont.)
7. 1970s: The “bill” comes due
--Inflation & Recession
--Stagflation
8. 1980s: Reaganomics--intended to reduce
govt. in marketplace, enhancing free
market & national security (in fact greatly
increased federal spending)
9. 1992: Clintonomics I--”new
liberalism” to reduce govt. with
social concern (mixed success)
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Role of Government (cont.)
10. 1994: Conservative “revolution”
--”contract” to reduce federal govt.
& let state or private sector decide
(mixed success)
11. 1997: Clintonomics II--”new
liberalism” constrained by
Conservative Congress
12. 2001: “Compassionate
Conservatism”???
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Role of Government (cont.)
13.
2002+:



Global Terrorism Wartime Economy;
Desire to downsize domestic govt.
conflicts with entrenched interest
groups
“W” legacy still evolving
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The Role of the Federal Government?
“. . . Getting government off the back of business
simply means putting business on the back of
government. . . . Historically it is the national
government that has served as the protector of
the powerless.
“. . . Democratic capitalism has triumphed because
of the long campaign of reformers . . . To use the
national government to humanize the industrial
order, to cushion the operations of the economic
system, to strengthen the bargaining position of
workers and farmers and consumers, to regulate
wages and hours, the quality of products and the
sale of securities, to insure against recurrent
depression by built-in economic stabilizers, . . .
To combine individual opportunity with social
responsibility . . .” --Arthur Schlesinger, Jr.
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(1995)
Legislative Key Committees
Senate Ag Committee (20 members; 11 R; 9 D)
Chair: Chambliss (GA)
Subcommittees (4)
Production/Price Competitiveness (McConnellKY)
Marketing, Inspection & Product Promotion
(Talent-MO)
Forestry, Conservation & Rural Revitalization
(Crapo-ID)
Research, Nutrition & General Legislation
(Santorum-PA)
http://www.senate.gov/
http://www.house.gov/
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Legislative Committees (cont.)

House Ag Committee (45 members; 24 R; 21 D)
 Chair: Goodlatte (VA); Subcommittees (4)
 General Farm Commodities & Risk Management
(Moran-KS)
 Lucas (OK)
 Livestock & Horticulture (Hayes-NC)
 Conservation, Credit, Rural Development &
Research (Lucas-OK)
 Specialty Crops & Foreign Ag Programs (JenkinsTN)
 Dept. Operations, Oversight, Nutrition & Forestry
(Gutknecht-MN)
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Legislative Committees (cont.)

Senate Appropriations
 Chair: (Cochran-MS)
 Ag Subcommittee (Bennett-UT)
 House Appropriations
 Chair: J. Lewis (CA)
 Ag Subcommittee (Bonilla-TX)
 Senate Budget (Gregg-NH)
 House Budget (Nussle-IA)
 Senate Foreign Relations (Lugar-IN)
 House International Relations (Hyde-IL)
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Legislative (cont.)

Senate-OK reps’ committee memberships
 Inhofe (R-OK)
 Armed Services
 Environment & Public Works (Chair)
 Coburn (R-OK)
 Indian Affairs
 Judiciary (subcommittee chair)
 Homeland Security & Govt Affairs
(subcommittee chair)
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Legislative (cont.)

House—OK Representatives’ memberships
District 1– Sullivan (R-OK)
 Energy & Commerce
 District 2--Boren (D-OK)
 Armed Services
 Resources
 District 3--Lucas (R-OK)
 Agriculture
 Financial Services
 Science

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Legislative (cont.)
 House
OK Reps (cont.)
District 4-- Cole(R-OK)
 Rules
 Ethics
 Armed Services
 Deputy Majority Whip
 District 5--Istook (R-OK)
 Appropriations

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Policy Philosophies

Free Market
 Let market work; market signals must be
allowed to work
 Govt. action ineffective/part of problem
 Humanitarian
 Feed expanding world population
 Govt. obligated to expand production
(distribution is important)
 Right-to-food
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Political Philosophies
(cont.)

Agricultural Fundamentalist
 All real wealth in land/agriculture
(Physiocrats)
 Govt. must preserve agriculture to
preserve culture & society (parity concept)
 Stabilizer
 Instability is the real problem
 Govt. must stabilize prices
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Political Philosophies (cont.)
 Regulator
 Free
market is unreliable, unstable
(chronic problems)
 Govt. must plan entire process for
“rational” coordination to control
production, educate key players &
consumers
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USDA
 Farm
& Foreign Ag Service
 Marketing & Regulatory Programs
 Food Safety
 Rural Development
 Natural Resources & Environment
 Food, Nutrition & Consumer Services
 Research, Education & Economics
http://www.usda.gov/services.html
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Forces of Policy Change
 Instability
 Globalization
 Technology
 Food
Safety
 Environment
 Industrialization
 Politics
 Unforseen Events
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Changing Control
Environmentalists
Taxpayers
Sec. of State
AG
POLICY
USTR
Agribusiness
Ag Producers
Consumers
Others
30
Fact or Myth or Belief?
1. Agrarian values are simple & basic
to American values.
2. Farming is the primary rural
business, occurring only in rural
areas.
3. Most farms are “average”.
4. Production = productivity in ag.
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Fact or Myth or Belief?
5. Farm prices alone describe the
farm financial situation.
6. US ag does not need global trade.
7. “Good” farming means a healthy
environment.
8. Farm programs are effective food
programs.
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Fact or Myth or Belief?
9. Govt. programs are successful in
achieving their stated goals.
10. The trend toward fewer, larger farms
is escalating.
11. Large corporations have taken over
farming.
12. Most farm family income comes from
farm income.
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Assignment
 25 Aug:
Read Knutson Ch. 1, 3
 Identify OK US Senators &
Representatives; list their committee
assignments (CLUE: Check these web
sites
 http://www.house.gov;
http://www.senate.gov)
 1 Sep: Read K ch. 2; determine which
statements are facts, myths or beliefs on
slides 30-32 & briefly explain.
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Fall 2005: Class-defined
Issues (not prioritized)
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