Agricultural Questions Answered

The Freakonomics blog at The New York Times is based on Steven Levitt and Stephen Dubner's best-selling book.  The blog now has many invited authors (mostly economists).  It also features invitations for readers to ask questions on a subject.  Recently Daniel Sumner, an agricultural economist at UC-Davis, responded to questions about agriculture, including the effect of subsidies, questions on local production, carbon footprint of imported and domestic food, and a host of others. 

(Sumner was accused of treason by the California Cotton Growers Association for arguing in favor of ending cotton subsidies.  That may have been the first time an economist was accused of treason.  Fortunately, Professor Sumner is still alive and publishing.)

Some of his observations and answers:

His answer to whether there’s a good argument to be made for farm subsidies:  “No.”

Why do dairy farms need to be so large?

If a farmer spends his days milking his 50 cows, he earns, at most, what a cow milker gets paid — say $10 per hour. To make a middle class living in the dairy industry, a farmer needs to pay milkers to do that job while he spends more of his time being a manager. That means a farm big enough to make better management pay.

Is the carbon footprint of domestically produced lamb lower than lamb imported from New Zealand?

Lamb in New Zealand is mostly grass fed on pastures that have lots of rainfall. Lambs in the U.S. tend to be fattened on grain and alfalfa, often from irrigated fields.

And

It is also far from clear that local production is more conserving of energy, has a smaller greenhouse gas footprint, or is otherwise nicer to the environment.  Consider the energy it would take to grow lettuce in greenhouses compared to in the fields of Monterey County. It turns out shipping long distances is cheap in many ways compared to fighting natural comparative advantage to grow crops in inhospitable environments.

Of course, if you only want to eat lettuce for a few months of the year, local production looks better.  But most of us are not willing to forego lettuce in winter (or Spring, or late Fall)  Or do without peppers, spinach, broccoli, cucumbers, zucchini, tomatoes, peaches, nectarines, plums, avocados, or a host of other fruits and vegetables for most of the year.

Read the whole piece. It deals with many issues Vermonters seem to be concerned about.

Comments

Below is a quote from WCAX newsman Marselis Parsons, from his 6pm newscast on 7/14/08.

What it demonstrates is the extent to which the myth of Vermont's Agriculture industry permeates Vermont's culture; which aids in avoiding the dire need of moving beyond this "Agrarian Myth" and on to expanding existing and new businesses and industries and entering into 21st century modernity.

"And the city of Colchester may form a Sister City relationship with a town in Macedonia. Colchester town Manager Al Voegele came up with the idea saying that Colchester would benefit from being exposed to another part of the world. Macedonia is small, mountainous and the economy relies heavily on agriculture similar to the state of Vermont."

It is the last sentence "Macedonia is small, mountainous and the economy relies heavily on agriculture similar to the state of Vermont" that demonstrates the myth. As shown below, Vermont's state Gross Domestic Product (GDP) derived from agriculture accounted for 1.5% of 2007's GDP; hardly an "economy [that] relies heavily on agriculture." Less than 1% of the workforce is involved in farming and at wages far below the average.

In descending order, is Vermont's 2007 GDP, as published by the Vermont Economy Newsletter, July 2008, page 3:

Vermont GDP:

Total GDP:

Government 13.7%
Manufacturing 11.5%
Health Care 10.0%
Retail 8.3%
Prof/Tech/Admin 8.0%
Finance 5.9%
Wholesale 4.8%
Construction 4.5%
Hotel, Rest. 4.4%
Information 4.1%
Utilities 2.1%
Transportation 2.1%
Private Education 1.7%
Agriculture 1.5%

[Cairn Cross]

Is it just me or do those figures not add up to 100%?

Good catch. Utilities at 3% was left off.

With Douglas forced to cut Government, our Manufacturing base shrinking, our largest Utility in Vt. Yankee at risk of closing and Construction at a near standstill, things - from a percentage point of view - are looking up for the Agriculture sector!

We may all need to plant an "extra row" just to survive the winter.

Ahhh, the Vermont way...

[GreggB]

Damned if I know. Me went to reading place not adding place down the road. What I do know is VT dairy farmers converted all those dairy barns into porno theaters the farmers would be whole lot richer.

I contacted the authors of "The Vermont Economy Newsletter" to get an explanation of why these numbers do not add to 100%.

Essentially, the remaining portion is basically a number of small sectors, the largest of those being the real state sector. The problem with this sector is that much of the gross state product is the imputed value of owner occupied housing, something difficult to briefly explain and the authors decided to exclude it in their calculations.