The Impact of Applied Research in Agriculture and Applied Economics on The U.S. Economy

Photo by Michael Held on Unsplash

In our on-going effort to support the continuing need to highlight the importance of the applied research and economics, the Council on Food, Agricultural, and Resource Economics (C-FARE) hosted a panel of scholars presenting on the topic of The Impact of Applied Research in Agriculture and Applied Economics on The U.S. Economy. This event took place on January 22nd at noon.

The importance of research in agricultural and applied economics has only heightened as the population increases. Today’s farmers produce 262 percent more food with two percent fewer inputs as compared to 1950. A significant component of this increase in agricultural productivity is due to large investments in public agricultural research.

Panelists Robbin Shoemaker (USDA NIFA), Keith Coble (Mississippi State University), Madhu Khanna (University of Illinois), and David Zilberman (University of California at Berkeley) discussed their on-going research and how it relates to the impact of applied research on the U.S. economy. This event was moderated by Gal Hochman, C-FARE’s Board Chair, and Professor at Rutgers University. 

Robbin Shoemaker started the presentations by providing a baseline of knowledge by explaining the importance of “why do economics and social science matter for food, agricultural and natural resource issues?” He demonstrated by stating that “Economics is all about decision making: choice, allocation, distribution, and scarcity. Economics looks at the issues faced by individuals and society through a lens defined by these concepts.”

Dr. Shoemaker wanted the audience to understand that no matter the good an economist is studying, it can have invaluable information on the issues facing society and how to fix them.

Dr. Shoemaker continued further by providing several examples of valuable projects that USDA-NIFA funded, including C-FARE’s Jane Kolodinsky’s study on the Economic Impacts of the Hemp Industry: Opportunities for Rural Development. This study aimed at studying economic opportunities within the hemp industry.

Keith Coble followed up after Robbin Shoemaker on the topic of Agricultural Research and Risk Management in Agriculture. He used the revitalization of the crop insurance industry as an example of how Agricultural Economists directly affect the U.S. Economy.

Dr. Coble stated, “For many years, crop insurance in the U.S. was plagued by poor actuarial experience due to a lack of knowledge regarding farming and agriculture. Agricultural economists were asked to tackle the issues that made crop insurance difficult and unaffordable. In many cases, the proposed solutions provided by agricultural and applied economists were adopted by the USDA. Today the crop insurance market is almost a $4 billion per year industry and sells $1 billion per year of index insurance.”

Madhu Khanna presented on the topic of Economics, Land Use, and the Environmental Impact of Biofuels. Her presentation focused on using the agricultural and applied economist perspective to highlight how there is a “key role for advanced bioenergy in mitigating greenhouse gas emissions, improving water quality and increasing farm income.” She believes that it is “possible to meet the demand for food and biofuel by using land more efficiently.” Her study acts as evidence that agriculture has the capacity to respond to higher demand and higher crop prices with technological change and increasing productivity.

Dr. Khanna sees her research as a prime example of the positive effects that agricultural and applied economists have on the U.S. economy through their studies. Without this work, how would farmers be able to learn about the economic viability of growing biofuels?

David Zilberman was the final panelist, and his presentation was titled Agricultural Economics Research: Contributions to Policy. He highlighted that agricultural and applied economists were to thank for California’s Water Bank system, where the Delta and Central Valley began to trade water between locales. This helped combat the drought from 1987-92 and protected California’s agricultural industry from decimation.  

Dr. Zilberman was asked what he believed the future held for the field of agricultural and applied economics, and his response was, “Agricultural economics evolves in two directions. First, with increased data we are able to be more precise in our analysis, understand behavior and choices better, and provide better advice. Second, while the focus of agricultural economics has been on markets, its turning towards understanding value change and the linkage between innovation, value change, and markets. Markets and new products are the result of innovation and are outcomes of new value changes that implement these innovations.”

This program is supported in part by the Agricultural and Applied Economics Association and the U.S. Department of Agriculture’s Economic Research Service, and National Agricultural Statistics Service.

Those who register but cannot attend our webinar can always view a recording of it later at the council’s YouTube channel.