1. AGRICULTURAL PUBLIC POLICY & HOW IT WORKS IN U.S. Larry D. Sanders Fall 2005 Dept. of Ag Economics Oklahoma State University.

1. AGRICULTURAL PUBLIC

POLICY & HOW IT WORKS IN U.S.

Larry D. Sanders

Fall 2005

Dept. of Ag Economics Oklahoma State University

2

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

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Introduction--continued

Process Learning Objectives; develop skills of:

1. Critical Thinking

2. Written & Verbal Communication

3. Problem Solving

4. Teamwork

4

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

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“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 DefinitionDeterminants of Policy PositionAgricultural Policy ObjectivesPolicy 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

OOv

OOv

TWO WORMS

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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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King-Makers

Kings

Actives

Interested Citizens

Apathetic Citizens

Kings and Kingmakers Model

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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. (1995)

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Legislative Key CommitteesSenate Ag Committee (20 members; 11 R; 9 D)

Chair: Chambliss (GA)

Subcommittees (4)

Production/Price Competitiveness (McConnell-KY)

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 (Jenkins-

TN) 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 ServicesEnvironment & Public Works (Chair)

Coburn (R-OK) Indian AffairsJudiciary (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.)

RegulatorFree 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 ServiceMarketing & Regulatory ProgramsFood SafetyRural DevelopmentNatural Resources & EnvironmentFood, Nutrition & Consumer ServicesResearch, Education & Economics

http://www.usda.gov/services.html

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Forces of Policy Change

InstabilityGlobalizationTechnologyFood SafetyEnvironment IndustrializationPoliticsUnforseen Events

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Changing Control

Sec. of State

Ag ProducersConsumers

EnvironmentalistsTaxpayers

USTR

Agribusiness

Others

AG POLICY

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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 siteshttp://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)