Professor: M. KILKENNY office hours: M,W 3:30-5:00pm
294-6259
Department of Economics, 565 Heady Hall
Texts: Food and Agricultural Policy: Economics and Politics
by Halcrow, Spitze, and Allen-Smith (1994)
McGraw-Hill, Inc; second edition.
Sacred Cows and Hot Potatoes: Agrarian Myths in Agricultural Policy
by Browne, Skees, Swanson, Thompson, and Unnevehr (1992) Westview Press.
Elements of Agricultural Trade Policies by J. Houck (1992) Waveland Press; 86th edition.
Time/place: M-W-F 12 noon; 160 Heady Hall
Prerequisites: Intermediate Micro Theory
Course Overview: The objective is to learn how to analyze farm programs and agricultural trade patterns and policies. What effects do agricultural policies have on farm income, output, land use, prices, trade, government budgets, taxpayers, and consumers? We review micro theory and develop the graphical and mathematical tools for policy analysis. We analyze domestic farm programs. We also analyze international trade patterns and trade policies of the U.S. and other countries. Our emphasis (Fall 1996) will be on: 1995 Farm Bill; free market alternatives to gov't farm programs; environmental issues; concentration; exporting and competing in world markets.
Homework: (1) Read text and other assigned readings before lectures. There are four types of required readings: (i) textbook chapters, (ii) chapters in other books, (iii) journals articles, and (iv) newspaper and other popular press articles. Only very current articles will be distributed in class; all other readings will be available in the Economics/Sociology Reading Room, 368 Heady Hall. (2) Take-home assignments are graded +,(check),- or 0 (no show). No late homework is accepted. A student with a borderline score who turns in (#-1) homework on time will earn the higher grade for the course.
Exams: There will be three tests during the term, plus a final exam. The tests cover the lectures, homework, all reading material, and your ability to reason. The final exam is comprehensive, including project presentations by classmates.
Term Project: Analyze a policy topic of your choice such as: Title in the 1995 farm bill, an article of the GATT, NAFTA, FDA regulations; antitrust cases; swine-odor regulations,... Topics are to be chosen in consultation with the professor by Friday, October 18. Outlines are due Monday, October 21. Complete written first drafts are due no later than Friday, November 22. Oral presentations will take place during the last two weeks of class. Finished papers are absolutely due by Friday, Dec. 13.
Grading: Eighty (80%) of the grade is based on exams: the best three of the four exams (three tests plus the final) will count for 25% each, and the worst will count for 5%. The term project is worth 20%. Homework helps you earn a higher grade in borderline cases. Students are graded on the material; not in competition relative to their classmates. Thus, it's possible for the whole class to earn "A's," as long as everyone demonstrates mastery of at least 93% of the material. The grading scale is:
0-53% 54-57 58-60 61-64 65-68 69-72 73-75 76-79 80-83 84-88 89-92 93-100%
F D- D D+ C- C C+ B- B B+ A- A
Dates topics reading
8/26-30 Overview; policy processes; history of farm policies HS&AS ch 1,2,3
Orden, Paarlberg & Roe Choices Q1'96*
Zulaf & Tweeten Choices Q1'96*
9/4-11 Supply, demand, technical change, scale HS&AS ch 4
revenues, profits, treadmills Sacred Cows ch 5
9/13 Welfare analysis: consumer and producer surplus HS&AS ch 11
9/16-25 Reasons for farm programs; Tweeten Choices* Q2'95 HS&AS 6;
market failures: externalities, market power Baumol&Blinder*
monopoly, monopsony, information asymmetry Rogers&Sexton AJAE*
instability, risk Boxley Choices Q1'90*
9/27-30 government failures policy backfires Sacred Cows ch 10
dirt poor and land rich farmers Sacred Cows ch 6
Oct 2 EXAM I
10/4-11 Farm income and price support programs HS&AS Ch 8
with/without supply control HS&AS Ch 7
deficiency payments, gov't stocking, land set-asides
10/14-18 1995 Farm Bill Salathe & Langley USDA-ERS*
price/supply/trade projections Johnson, et al FAPRI 1996*, RAPS 1996*
Natural resources, HS&AS Ch 12, Sacred Cows ch 8
toxic chemicals, food safety HS&AS Ch 13
10/21 Modern private/market approaches Vukina, Roka, Palmquist Choices Q1'96*
CARD 9/96*
Banquet & Skees Choices Q1'94*
Oct 21 Term project TOPIC OUTLINE due today
Oct 23 EXAM 2
10/25 International Agricultural Trade Houck ch 2,3,4
specialization, comparative advantage Hertel Choices Q2'96*
10/28-30 Policy analysis: tariffs, quotas Houck ch 5, 7
11/1-4 Export policies; quotas, taxes, subsidies Houck ch 10, 12
11/6 Exchange Rates and Trade
11/8-13 European Ag. policies, LDC policies, GATT Olson Choices Q4'90*, IATRC #9*
Nelson, Simone, Valdez Choices Q1'94
Nov 15 EXAM 3
11/18-22 Demand expansion: Food Stamps, PL 480 HS&AS Ch 10, USDA/ERS*,
World food needs Pinstrup-Anderson Choices Q3'94*
Sacred Cows Ch 9
Nov 22 FIRST DRAFTS of TERM PROJECT PAPERS due
Nov 25-27 Contemporary Issues
Dec 2-13 Term project class presentations
TERM PROJECT PAPERS DUE FRIDAY DECEMBER 13
FINAL EXAM (tentative) Friday Dec. 20, 9:45-11:45