The publications in this collection do not reflect current scientific knowledge or recommendations. These texts represent the historic publishing record of the Institute for Food and Agricultural Sciences and should be used only to trace the historic work of the Institute and its staff. Current WFAS research may be found on the Electronic Data Information Source (EDIS)
site maintained by the Florida Cooperative Extension Service.
Copyright 2005, Board of Trustees, University of Florida
COMPREHENSIVE RESEARCH PROGRAM PLAN FOOD AND RESOURCE ECONOMICS
INSTITUTE OF FOOD AND AGRICULTURAL SCIENCES
UNIVERSITY OF FLORIDA
COMPREHENSIVE RESEARCH PROGRAM PLAN FOOD AND RESOURCE ECONOMICS DEPARTMENT
TABLE OF CONTENTS
Brief Historical Overview 1
Research Perspective 3
Interaction with Industry and Other Disciplines 7
Major Problem Areas 8
MISSION AND GOALS 10
Resident Instruction 10
Programs Areas 11
Production/Farm Management 11
Agricultural Marketing 12
Natural Resource Economics 12
Community and Rural Development 12
International Agricultural Development 13
Econometrics and Decision Sciences 13
Farming Systems 13
FARM Systems Laboratory 13
RESEARCH PROGRAM AREAS 14
Research Program Area Objectives 14
RESEARCH AREAS FOR SPECIAL EMPHASIS 21
Agricultural Land Retention 21
Agricultural Law and Economics 23
Agricultural Marketing 23
Analysis of Community Problems 26
Changing Technologies and Policies on People 27
Decision Making for Farm Firms 28
FARM Systems Lab 31
Macroeconomics and Agriculture 32
Quality of the Environment and Recreation 33
Small Farms and Farming Systems, 34
Water Quantity and Quality 36
TABLE OF CONTENTS (continued)
RESEARCH THEME FOR THE 1980's 37
IMPLEMENTATION OF RESEARCH PLAN 37
Existing Programs and Projects--Process and Criteria
for Review, Revision, and Termination 37
New Programs--Process and Criteria for Review,
Revision, and Termination 38
Personnel Needs--Faculty and Career Service 39
Facility Needs 40
COMPREHENSIVE RESEARCH PLAN
FOOD AND RESOURCE ECONOMICS DEPARTMENT INTRODUCTION
Brief Historical Overview
The discipline of agricultural economics has been represented at the University of Florida since the arrival of Dr. J. E. Turlington in 1914. Courses in agricultural economics (including farm management, marketing and rural law) were taught during the next decade. In 1926 a Department of Agricultural Economics was formed in both the teaching college and the Agricultural Experiment Station. Prior to this time and the availability of federal funds from the Purnell Act, there was no agricultural economics research program in the Florida Agricultural Experiment Stations. There was, however, a limited amount of research being carried on in the College of Agriculture in conjunction with the teaching program.
At the outset, the research program was focused on commercial
agriculture and primarily on vegetable and citrus production and mar-, keting. Farm management studies were initiated in the late 1920's and some research in marketing has been in the departmental program for more than 45 years. Research on land tenure was initiated after World War II, and in the early 1950's the manner in which water was being managed was being investigated. Since 1960 the scope of the research program has expanded to include: 1) Studies of the sectors and subsectors of the economy through which agricultural products pass as they become
available to consumers, 2) interdisciplinary studies of the economic impact of the adoption of the results of research being conducted in other departments, 3) economic analyses of the utilization and management of the state's natural resources, 4) evaluation of the economic impact of the use of new production techniques in countries having a subtropical climate similar to that in Florida and its application to Florida, 5) analysis of problems in the development of rural areas and communities,
*6) the study and development of econometric and other quantitative methods for application to agricultural problems, 7) the use of computerized (analytical and data) systems to analyze problems, and 8) cooperative research with agencies such as USDA and the Florida Department of Citrus.
The history of agricultural economic research at the University of Florida--just as for the entire nation--is really the history of how people make scarce agricultural resources satisfy their numerous and diverse wants. Ever since the Constitution was adopted, members of Congress and the State Legislatures have concerned themselves with how the American people allocate their resources in the production of food and fiber.
Over the past sixty years, the agricultural economics profession has been characterized a-s one of growth, diversification, and change. The impetus for the fluidity of our profession stems from the attempt to be responsive to the perceived needs of the times. The emphasis of our profession has been on the problem-solving approach to research. This not only involves applied research to current problems, but also basic research to develop the techniques, knowledge and understanding which enables us to identify and solve relevant problems. Moreover, our ability to anticipate problems and develop solutions and alternatives continues to help prevent potential problems from becoming burdensome realities.
An economist's laboratory is the world, and the world is constantly changing at an ever-increasing rate. As the world in which we live continues to become more dependent on and influenced by economic forces, our research will continue to adjust to effectively address current and emerging economic problems. In order that we may stand ready to meet the research challenges ahead we will need to continue to assume a posture that is both flexible and responsive while maintaining a research program that is well grounded in basic research and consistent with the goals of IFAS and beneficial to our constituents in the state of Florida.
While we may herein attempt to establish research goals and priorities, we must also recognize the diversity and uniqueness of Florida agriculture, aquaculture, and natural resources and the probability that today's priorities, no matter how well conceived, may differ considerably from the priorities of tomorrow.
The decade of the 70's was one in which we more clearly recognized that there are effective constraints to growth, and that attempts at business as usual would simply result in high rates of inflation, higher unemployment and lower or declining economic growth. The decade of the 80's will be one of adjustment to this reality--a transition to an environment of tighter natural resource constraints and relatively higher energy prices.
U.S. and Florida agriculture have experienced an increasing integration with the world economy over the last decade and all indicators point towards a continuation of this trend throughout the 1980's. The internationalization of U.S., and more specifically Florida, agriculture has-manifested itself both as an increased involvement of domestic producers in export markets, and as an enhanced vulnerability of domestic agriculture to international shocks and sources of instability.
Some of the foreign developments affecting U.S. and Florida agriculture have been the sixfold increase in world petroleum prices, the abandonment of the Bretton Woods system of fixed exchange rates and the adoption of a floating exchange rate, regime, and the increase in foreign competition. The increase in import competition, in particular, has posed a considerable threat to Florida producers of such products as vegetables, cut flowers, citrus fruit, subtropical fruit and beef.
Equally important for the state of Florida has been the recent
emergence of a number of developing countries both as major export markets for U.S. and Florida agricultural products, and as major sources of import competition directly affecting Florida's agricultural industries. The future prosperity of Florida's agricultural sector will be directly linked with developments occurring abroad and, in particular, those taking
place in developing countries. It is imperative that agricultural economists enrich their knowledge on a comparative international basis in an attempt to predict and respond to the forces of change in Florida's agriculture during the 1980's.
It is clear, therefore, that research in the Food and Resource
Economics Department will have to account for the internationalization of U.S. and Florida agricultural sectors. International studies will have to concentrate on the nature of the response to the challenges facing Florida as an increasingly integral part of the world agricultural economy.
Over the next decade agriculture will be facing very rapid and far reaching changes. Resource availability and use will shift as energy supplies experience shortfalls, prices increase drastically and governmental regulations limit the application of agricultural chemicals and fertilizers. High interest charges will greatly affect the economic availability of short, intermediate and long run capital. The number of production alternatives that can repay high interest loans will be greatly restricted. Land use regulations and increased taxation will put additional pressure on agricultural land. Price uncertainty will increase as international competition increases.
The agricultural sector of the U.S. and the world economy is heavily dependent upon, and includes four major biological, or natural resource, systems. These systems--croplands, grasslands, forests, and marinefisheries--along with water, air, minerals and petroleum-derived synthetics, provide all the raw materials necessary to operate the economic system. Energy resources, also a part of the natural resource base, are mixed with these raw materials and the knowledge and desires of the human
element to provide a particular array of products. It is this natural resource base that is of concern to natural resource economists.
The 1980 Census of Population has confirmed that for the first time in more than 160 years the population growth rate in the United States was higher in rural and small town communities than in metropolitan areas. Nonmetropolitan counties in Florida increased an astounding 50.8 percent during the 1970's. This compares with a 39.2 percent for metropolitan
-counties and a 41.1 percent increase for the state as a whole. Rapid population growth rates for nonmetropolitan Florida are expected to continue throughout the 1980's. Rural areas and small communities are being challenged by this rapid growth and the changes being experienced profoundly affect the economic social, political and environmental configuration of the community.
Agriculture is also challenged by this growth as farming has many interfaces with the nonfarm sector. The National Agricultural Land Study reported that Florida is losing agricultural lands at the rate of 300,000 acres per year, and faster than any other state. There is increased pressure for higher property taxes to finance desired public services. To have a vital, efficient agricultural industry and rural communities with a high quality of life, Florida's leaders and citizens must have adequate information upon which to base state and local programs and policies.
Agricultural marketing problems are more pronounced in Florida
relative to most other states because of the large and diverse number of farm products, as well as the national importance of many products produced in Florida.. Also, because of Florida's geographic location and peninsular configuration, energy costs for transportation of food
and agricultural products into and out of the state are much more signigicant.
Agriculture obviously is in a state of transition. Several forces are operating with potentially great impacts on agriculture. First, .energy prices have and will continue to increase. Second, continued growth and development in the state is exerting increasing pressure on land, water, environmental and community resources. Third, the integration of agriculture into both the national and world economies has resulted in rapidly changing and dynamic comparative advantages between commodities, between states, and between countries. Fourth, this same integration has added a new dimension of complexity and uncertainty to decision making in agriculture. Finally, recent developments in electronic circuitry and miniaturization technologies is spawning a new age of computerization centered around private ownership and use of microcomputers in decision making. Each of these forces has significant implications for agriculture in Florida. The Food and Resource Economics Department has the expertise to address these issues and looks forward to the challenge and excitement of the coming decade.
,Interaction with Industry and Other Disciplines
The Food and Resource Economics Department has traditionally served a wide range of private firms, agricultural industries, institutions, communities, and other agriculturally related organizations. In addition, the department interacts with other disciplines within IFAS, within the University of Florida, and other research and educational institutions.
An example of research conducted for individual farm firms are the crop and livestock enterprise budgets and energy use analyses performed
by the Farm Systems Lab. Research on problems faced by agricultural industries constitute a major thrust of the department's program. A number of commiodity and farmers' organizations have over the years relied on research by FRE faculty in addressing specific problems confronting their respective industries. Industries that have benefited from FRE research programs include citrus, livestock, vegetables, ornamentals, and fisheries.
The Department also conducts research that has been of use to various government and community groups and organizations, such as water management districts, rural development committees,, regulatory agencies, state planning and development agencies, and legislative and executive branches of state government.
The FRE department closely interacts with a number of research
programs and disciplines in IFAS including Agricultural Engineering, Soils, Agronomy, Food Science and Human Nutrition, Vegetable Crops, Fruit Crops, the Centers for Rural Development, Environmental Programs, and Tropical Agriculture, and the Office of International Programs. Within the University of Florida, researchers from the FRE department cooperate and interact with faculty in the Economics, Anthropology, Statistics, Sociology, and Environmental Engineering departments. Research faculty in FRE also interact with other faculty in the Centers for Latin American Studies, African Studies, and Econometrics and Decision Sciences. Major Problem Areas
With this historical background and perspective of the Food and
Resource Economics Department, the following list of some of the major problem areas that confront agricultural producers, industries, communities,
and other agriculturally related organizations were identified:
1. Production firm efficiency
2. Marketing firm analysis and efficiency
5. International competition and trade 6. Interregional competition and trade 7. Government policies and regulations
8. Capital and credit
10. Prices and margins
11. Resource and enterprise combinations
12. Adequate information for economic decision makings
13. Computer technology and analyses for producers and policymakers
14. Industry structure and performance
15. Technology generation, evaluation, and modification
16. Acquisition and management of primary and secondary data
17. Agricultural policy and programs
18. Forecasting and outlook
19. Market development
20. Consumer behavior
21. Water quality and quantity
24. Economic planning
25. Poverty and welfare programs
26. Industrialization, development and land use
development and the socio-economic problems, such as environmental quality, which are created by changes in our society. It also recognizes a responsibility to widen and deepen the stock of basic knowledge that will be of value in identifying, preventing, and solving future problems.
The overall goal of the extension program is to provide private and public decision makers in Florida with educational information regarding farm and agribusiness management, agricultural marketing, natural resources, community and rural development, and marine resources.
The Department has integrated its research, extension, and teaching functions in the following program areas: production/farm management, agricultural marketing, natural resource economics, community and rural development, international agricultural development, econometrics and decision sciences applied to agriculture, farming systems, and FARM Systems Laboratory. A faculty workgroup exists for each of these areas.
Faculty in the production/farm management workgroup collect technical and economic data regarding enterprises and firms producing and marketing agricultural products; evaluate decision making criteria and behavior of agricultural firms and commodity groups; appraise the impact of availability and substitutability of inputs on structure and performance; develop applications of computer technology to decision needs of firms and commodity groups; and evaluate the impact of taxation, government regulations, and policies on structure and performance.
27. Community services (water, sewer:,, health, financing)
30. Aesthetic, recreation, and environmental quality
MISSION AND GOALS
The role of the Department of Food and Resource Economics within the Institute of Food and Agricultural Sciences is to provide a flow of research, extension, and teaching services dealing with the economics of agriculture, natural and human resources, and rural, regional and international agricultural development and trade. The Department has statewide responsibilities in providing economic input to agricultural and resource problems.
The general goal of the resident instruction program is to teach
students to analyze the economic implications of the physical, biological, and institutional factors associated with making decisions in agriculture, agriculturally related industries, and natural and human resources. Research
The general goal of the research program is to provide knowledge
which is needed to guide decisions in the production, marketing, distribution, and consumption of food, fiber, and marine products and the development and more efficient use of natural (including marine), human, and capital resources. The program recognizes the need for human resource
Marketing activities include a variety of important subject areas such as international competition and trade, market development and consumer behavior, transportation and distribution, industry structure and performance, government regulations and agricultural policies, price and margin analysis, forecasting and outlook, interregional competition and trade, and marketing firm analysis and efficiency. These functional areas are applied to various commodity groups such as citrus, vegetables, livestock and products, ornamentals, field crops, deciduous fruits, and tropical fruits.
Natural Resource Economics
This area involves the economics of natural resource use, ownership, conservation, development, and management. Natural resource economics deals with land, water, energy, minerals, forestry, marine resources, air, and the environment in general. The program emphasizes policy issues related to these resources.
Community and Rural Development
Community and rural development is oriented toward improving our understanding of the efficiency and equity of public policies and programs as they relate to rural areas. It includes many vital concerns of people in rural communities, such as agricultural l'and retention, land use planning, community services, economic development, and small farms.
International Agricultural Development
This area concentrates on the nature of the response to the challenge facing Florida as an increasingly integral part of the world agricultural economy. Our work in international trade and policy seeks to analyze the competitive position of Florida agriculture in international markets, while the area of tropical agricultural development addresses tropical and subtropical agricultural development through the interface between domestic and international technical assistance.
Econometrics and Decision Sciences
This is a basic support discipline for the applied research economists in the Department, as well as for the training of professional agricultural economists. The subject matter is both theoretical and applied. Emphasis is upon application to agricultural problems.
This is a multidisciplinary program designed for small, usually
diversified farmers in Florida. Emphasis is upon the farm unit and the development of technology and management assistance to improve the farmer's well being.
FARM Systems Laboratory
FARM Systems Lab provides academic support for analyzing the impacts of changes occurring in Florida's agriculture. The Lab acquires and manages agricultural data, develops computerized analytical systems, and delivers computerized decision aid software and analyses to producers, agribusinessmen, extension personnel, and policy makers.
RESEARCH PROGRAM AREAS
An increased demand for agricultural economics knowledge by a
society facing a larger number of interdependent problems has been the primary reason for the expansion of agricultural economics research into areas that agricultural economists were not involved in at the turn of the century. The American Agricultural Economics Association recently published a list of program areas within the agricultural economics profession (Table 1).
The Food and Resource Economics Department does not have active
research in each of these areas but Table 1 does provide an overview of the program areas within which research should be conducted to solve the problems expressed in the demand for agricultural economics information. The Department has workgroups active in the following areas: production/farm management, marketing, community and rural development, natural resources, econometrics, international development, FARM Systems Lab and Farming Systems.
Research Program Area Objectives
The objectives for the various research program areas are embodied in the following list of 49 problem or program areas:
Table 1. Program areas within agricultural economics
Farm Management/Production Economics
Farm Production Economics
Farm Accounts/Record Keeping
Farm Firm Growth
Firm/Plant/Market Efficiency Food Processing/Distribution
_Plant Location/Interregional Trade
Decision Analyses/Risk Management
Agricultural Price/Income/Policy Analysis
Commodity Sypply/Demand Analysis
Agricultural Income/Expenses Agricultural Policy Analysis
Agricultural Sector Performance Measures
International Agricultural Trade/Development
Food Assistance Programs
Economic Growth/Development Agricultural Sector Analysis
Farm Financial Management Farm Lending/Institutions
Farm Real Estate Valuation/Prices
Table 1. Program areas within agricultural economics (continued)
Natural Resources/Environmental Economics
Environmental/Chemical-Animal Waste Management
Community Resource Economics
Land Use Zoning/Planning
State/Local Government Finance
Industrialization Economic Planning
Human Resource Economics
Welfare Programs Including Food Programs
Micro-Economic Theory Macro-Economic Theory
International Trade Theory
Regional Economics/Location Theory
Table 1. Program areas within agricultural economics (continued)
Research Methods/Econometrics/Statistics (continued) Research Methods/Philosophy
Agricultural Animal Sciences Agricultural Plant Sciences
1. Collect, develop a nd maintain current technical and economic data relative to enterprises and firms producing and marketing agricultural and marine commodities.
2. Evaluate the impact of high interest rates on the farm firm and the structure of Florida agriculture.
3. Appraise the impact of the limited availability of inputs and the substitutability of inputs on the structure and performance of
agricultural and marine firms and commodity groups.
4. Evaluate the impact of taxation, governmental regulation, national and international policy and changes in agricultural law on the
structure and performance of agricultural and marine firms and
5. Develop the principles, models and methodology for the application of computer technology to meet the information and decision aid
needs of agricultural and marine firms and commodity groups.
6. Evaluate information needs and economic decision-making criteria and behavior of agricultural and marine firms and commodity groups.
7. Generate technology for small, diversified farms in North Florida.
8. Evaluate and modify farming systems research and extensive methods for Florida conditions.
9. Price forecasting in commodity and input markets.
10. Estimate the relationship between quantity demanded of Florida
commodities and causative variables in various regions of the U.S.
and the world.
11. Estimate the supply response of Florida agricultural producers.
12. Analyze Florida's competitive position in interregional and
international commodity markets.
13. Estimate the response to advertising expenditures in promoting
Florida's farm products.
14. Estimate the demand for inputs (water, land, labor & energy) by
Florida's agricultural producers.
15. Analysis of marketing margins and transportation costs for Florida's
16. Systems modeling of Florida's agricultural sector. 17. Analysis of the impact of government, regulation and agricultural
policy on Florida agriculture and agriculture.
18. The impact of foreign trade and competition on Florida commodities. 19. Price and margin analysis with emphasis on the importance of
price and efficiency in the marketing system.
20. Analysis of transportation and distribution problems with respect
of Florida's geographic location and the importance of viable and
efficient systems to maintain Florida's competitive position. 21. Improving productivity in the food marketing and distribution
22. Analysis of market development programs and their impact on Florida
.23. Consumer behavior and the demand for Florida agricultural products. 24. Evaluation of industry structure and performance of agricultural
25. Forecasting of the outlook for supply, demand and price of Florida
agricultural and marine products.
26. Acquire and manage primary and secondary data relevant to the
management of Florida's agricultural resources.
27. Develop computerized analytical systems to help solve current and
emerging problems in agricultural and resource management.
28. Provide analyses of the impact of current and future trends in
regulation, resource availability and input costs on producers'
decisions and the future of Florida's agriculture.
29. Deliver computer technology and analyses to producers, extension
personnel, and policy makers to assist them in making decisions. 30. Minimize the costs of providing adequate public services in rural
31. Improve the education, training, skills.,and employment opportunities
for rural residents.
32. Identify needed housing policies and programs which will facilitate
adequate housing for rural residents.
33. Develop economic impact models to identify the consequences of
economic growth and development with emphasis on the role of the
agricultural sector in local economies.
34. Help rural areas utilize land in a manner to most efficiently
accomplish community goals.
35. Evaluate the efficiency of public revenue use and identify the
consequences on agriculture and rural communities.
36. Identify the economic impacts of industrialization -alternatives.
37. Improve the ability of rural residents to determine and control
economic events in their communities.
38. Develop improved understanding of population change and characteristics on rural areas.
39. Evaluate programs and policies designed to eliminate poverty in
40. Determine health care needs of rural residents and examine costs
of alternative health care programs.
41. Evaluation of-changes in the natural resource institutional setting
in Florida, with concern for appropriate structure, conduct and
performance of water agencies.
42. Analysis of the structure of property rights in land and water as
related to land use zoning and land and water use planning.
43. Evaluation of agriculturalists' rights structure in the release of
chemicals and excess fertilizers in land and water systems.
44. The rights and liabilities of agricultural firms with respect to
noise, odor and other 14 locally obnoxious "types of facilities."
45. An evaluation of resource agencies with respect to their capability
to deliver services desired by society and affecting agriculturalists.
46. Prediction of the response of individual farm-firms, agricultural
industries, and public agencies to changes in institutional settings,
natural resource market conditions and policies.
47. Quantification of the social and economic values and supply costs
of land, water, energy and natural resource systems in Florida.
48. Estimation of the optimal conservation levels, use and harvest
rates, and preservation rates of Florida's natural resources, especially as optimality relates to intertemporal allocation.
49. Analysis of the impact of Futures markets on Florida commodities.
RESEARCH AREAS FOR SPECIAL EMPHASIS
As the statewide economics research unit for the Institute of Food and Agricultural Sciences, the Department of Food and Resource Economics has developed expertise in such areas as production/farm management, marketing, natural resources, community and rural development, econometrics, international trade and development, small farms and farming systems, and marine economics. In many of these areas the Department collects origiinal data and provides decision makers with reports and publications on a regular basis. Examples of this type of applied research include the vegetable and citrus cost of production work, as well as the annual enterprise budgets prepared primarily by the area economists located at the Lake Alfred, Belle Glade, Bradenton, Quincy, and Marianna research and education centers. The point here is that most of the basic data generation and analysis conducted by the Department are important and necessary for the special emphasis programs discussed in this section of the report.
The "program areas for special emphasis" are presented alphabetically and thus without priority ranking.
Agricul tural Land Retention
Land use planning and decision making is one of the most complex and
least understood domestic concerns facing society today. Rights of private property owners, Jeffersonian land ethics, and perceived prerogatives of various levels of government influence our present land use system. Agriculture has been tremondously affected and has vital interest in public and private decisions regarding land use. Recent forecasts by some show Florida having no agricultural lands by the year 2000. Adequate farm
land to provide an abundance, of nutritious food has been and is a major concern of farmers and of society in general.
The historical role and importance of agriculture in Florida and
the competition for the use of land caused by the State's rapid population growth have combined to make the issue of protecting land for agriculture of critical importance. Although our technical understanding of many of the issues surrounding the increased competition for land has improved over the years, there are widely differing opinions on the need for additional policies to protect land for agriculture. These differences of opinion vary in intensity but are frequently strongly held because they represent special interests. Partly because of this diversity of interest (e.g., land speculators, realtors, developers, agriculture), public policies to resolve the conflicting land use objectives has been severely restricted. Additional research and education on the need for protecting agricultural lands is needed.
Some specific research areas include the following: analysis of the
factors contributing to changes in land use; documenting current uses of. land in Florida; determining the impact of projected population growth on agricultural land use; identifying the pattern of agricultural land ownership, including foreign ownership; evaluating changing patterns of ownership on agricultural production and the retention of land in agricultural production; providing analysis of alternative land use policies and regulations; and examining the structure and functioning of the rural land market, particularly in areas where land is being converted from agricul tural to non-agricultural uses.
Agricultural Law and Economics
The decade of the 1980's will be extremely critical for legal-economic research. The rural-urban conflict, changing public policies, increased competition for natural resources, and the Significant adjustments likely in the nature and structure of agriculture are just a few of the factors which will contribute to the importance of legal-economic research in the decade. While the problems and issues involve a wide array of subjects, a few examples of needed research include the following: the impact of the elimination of classified use appraisal of agricultural land for Ad Valorem taxation purposes; problems of agricultural land retention; analysis of alternative federal estate tax provisions upon intergeneration transfer of family farms; rights to scarce water resources; and the effect of changes in state and/or federal legislation involving cooperatives, agricultural labor, income taxes, environmental protection, occupational safety, commodity programs, and international trade. Agricultural Marketing
The marketing of agricultural and marine products is a major and
essential process of providing food and fiber for consumers. The importance of agricultural marketing stems from the fact that two-thirds of the consumers' dollar for food is expended for various marketing functions with the remaining one-third paid directly to farmers. The dramatic upward spiral in consumer food prices in recent years is due in large measure to the large increase in petroleum and other energy prices. These increases in energy costs have directly affected the costs of processing, wholesaling, transportation, and retailing services for food in Florida.
Agricultural marketing problems are more pronounced in Florida relative to most other states because of the large and diverse number of farm products, as well as the national importance of many products produced in Florida. Because of Florida's geographic location and peninsular configuration, energy costs for transportation of food and agricultural products into and out of the state are much more significant.
The matrix of functional activities and commodity areas (see page 25) represents the marketing faculty's current thinking as to the importance (in a research context) of the various sub-disciplines to specific commodities. This evaluation represents faculty opinion, interest, expertise, and bias. The matrix should-be approached on a commodity basis, as this is how priorities were assigned, across functional areas for each commodity. No attempt was made to assign priorities across commodities, but rather functional areas were evaluated for each commodity. For example, International Competition and Trade was considered to be an area of "High" priority research for citrus, while Market Development and Consumer Behavior was evaluated as a "Medium" research priority for citrus.
The evaluations reflected in the matrix suggest four functional areas which are considered to be high priority research areas forte foreseeable future. These include, not necessarily in order of importance, "Government, regulation and Agricultural Policy," which reflects the reality of the regulatory environment in which Florida agriculture and aquaculture now operates and will continue to operate in the future; "Price and Margin Analysis," which emphasizes the importance of price and efficiency in the marketing system; "International Competition and Trade," capturing the importance of foreign trade and competition to Florida
PERCEIVED MARKETING RESEARCH PRIORITIES IN TIE FOOD AND RESOURCE ECONOMICS DEPARTMENT FOR THE 1980's A B C D E F G I I
International ve oent, Transportation Istry o Price Forecasting Interregional a ing
Competition l and Structure Regulation, and and Competition Analysis &
Behavior D Performance Policy Analysis .Efficiency
I Citrus High Med Med Ned High Med High Low Low
2 Dairy Low Med Med High High Ned Low High Low
3 Field Crops Yed Low Low Low Med Ned Low Low Low
4 Fisheries High High Med Low High Med Low Low Med
5 Wtulesale & fled tied Med Hlligh High High Low Low High
6 Inputs Med Low Med Med Med Med Low Low Low
7 Livestock Med Low High Low Med High High High High
8 Ornamentals High Fed High Med Med Low Low High High
Other Med Med Med Med Low High Med Med Low
10 Poultry Low Med Med Low Med Med Low Low Low
11 Vegetables High Low High Med Med High High Med Med
commodities; and "Transportation and Distribution," highlighting Florida's geographic location and the importance of viable and efficient systems to maintain Florida's competitive position. While all sub-disciplines delineated are considered to be important functional areas, their importance tends to vary by commodity.
The transportation and international competition and trade areas are particularly worthy of additional efforts. Both subject areas strike to, the core of Florida's comparative advantage in national and international markets. Both are tied to the impact of rising energy prices. Economic studies are needed to evaluate the competitive position of Florida's agricultural industries from changes in transportation rates and costs of production among competitive suppliers. With regard to international trade and development, research is needed for not only the effect of competing imports upon the State's economy, but also the identification and analysis of export market development opportunities. Analysis of Community Problems
The 1980 Census of Population has confirmed that for the first time in more than 160 years the population growth rate in the United States was higher in rural and small town communities than in metropolitan areas. Non-metropolitan counties in Florida increased an astounding 50.8 percent during the 1970's. This compares with a 39.2 percent for metropolitan counties and a 41.1 percent increase for the State as a whole.
Rapid population growth rates for non-metropolitan Florida are expected to continue throughout the 1980's. Rural areas and small communities are being challenged by this rapid growth and the changes being experienced profoundly affect the economic, social, political, and
environmental configuration of the community. At the same time, conditions of poverty still exist for many rural residents. Federal policy has been dominated by urban concerns and rural residents have not been as skilled in obtaining-federal grants for public services.
Each community in Florida, regardless of its size, consists of a set of interdependent economic activities (agriculture, mining, manufacturing, etc.) which provide jobs and income for community citizens. Understanding this set of economic relationships and providing information about the local economy to citizens is the major focus of the work in Community and Regional Economic Development. Work in this area concentrates on problems, and issues such as efforts to measure the contribution of particular agricultural sectors to the economy, assess problems and potential in rural economic growth, identify the interrelationships of economic activity and natural resource utilization, identify those sectors and individuals most affected by escalating energy costs, provide technical assistance to various planning efforts in the State, evaluate alternative development strategies for Florida communities, assess the importance of tourism and recreation enterprises in rural areas, and assess the public and private sector impacts of community growth. This research is closely related to needed research on the economics of public services, efficiency of local government services, and finance.
Changing Technologies and Policies on People
The adjustments required of groups of people and of individuals to changes in agricultural production and marketing technologies and farm and food policies can be substantial. Historically, these impacts or adjustments have been identified and studied ex post rather than ex ante.
Although the mass exodus of labor from the agricultural sector has largely been completed, there are major new technological advancements in agricultural production, the structure of agriculture, food programs, and farm policies which need to be analyzed for their effects on individuals and groups of people. Examples of this work include study of agricultural labor markets and policies and study of the consequence of changes in food stamp and related food assistance programs. Findings of this research could be of substantial value in guiding policies to increase the general well being of rural people.
Decision Making for Farm Firms
It has been said that farmers of the future must learn to build their nests in the whirlwinds of change, and surely that is so. In 1980 alone we saw swings in corn prices from $2.56 to $3.96 per bushel, and hog prices ranged from $27 to $53 per hundredweight. Couple this kind of produce price gyration (and variation similar to this is expected to be the "norm" in the 1980's) with interest changes that eat up about $1 from every $5 gross income, and it is apparent why agriculturalists will need help in the 1980's.
Florida farmers need information to help them decipher the confusing signals being sent by the economy, by interest rates, by roller coaster prices. They need information about institutional changes such as land and water use regulations. They need improved "hands-on" means for processing this information to aid in their decision making.
Agricultural producers need analyses to help them assess different
management strategies. Ho w much, debt load can be tolerated in a specific production area, for example? Is diversification a strategy that will
have a higher payoff in the future? Will it be possible for farmers to continue to buy land as population pressures land prices upward?
As never before, FRED is turning its attention, its analytical
ability, and its imagination to finding ways to help Floridians adjust to an uncertain future. Work is underway on micros and other computerized information processing tools; work is underway on budget generators and cash-flow planning models that agriculturalists may use to test their own assumptions about the future; work is underway on decision-making strategies themselves--how, in fact, do farmers make the decisions they do (and then how could our information be put to better use); and work is begun on econometric models for helping with price forecasts. Econometri cs
Econometrics is a basic support discipline for applied research
economists. The econometrics area must receive greater research support in the 1980's if reliable and useful solutions to economic issues are forthcoming.
For the 1979-81 biennial budget, the Department's faculty reputation in econometrics was influential in the designation of the University of Florida's econometrics and decision-sciences programs for special Quality Improvement Program funding. Unfortunately, no IFAS funding was made available to support the econometrics work in Food and Resource Economics. Resources to strengthen econometrics and decision sciences in FRED as a counterpart to the Center of Econometrics and Decision Sciences in E & G would facilitate more complete data and more appropriate analytical procedures for the study of food and resource based problems.
It is proposed that a special Policy Analysis and Forecasting Unit be created within the Department. This unit would develop models to evaluate alternative state and federal policies, as, well as the effects of price shocks, freezes, and other stimuli. The unit could also make projections of supply and demand aspects of various input and commodity markets. For example, this unit could analyze the impact of changing government regulations on farm labor markets, and it could forecast the prices of other key inputs, such as fertilizers. Initial focus should be placed upon developing industry or statewide economic impact models as opposed to input and final product price projection forecasts. Energy
The energy-related issues are profound and are evident in many of the other program areas in this report. Some of the energy research objectives of the Department are as follows: identify the expected economic impacts on various sectors of Florida's economy, including the agricultural sector, as a result of rising energy prices and supply disruptions; evaluate the economics of alternative technologies with respect to agricultural production in the State of Florida, which would dampen the shock effects of higher energy prices; assess the feasibility of alternative conservation measures; determine the economic potential of alcohol fuels from sugarcane; specify the economic potential of producing gas from wood in agricultural operations and for electric power production; quantify the economic potential of photovoltaic systems in crop irrigation and in residential use; determine the economic potential of producing methane and algae from animal wastes; develop a systems analysis framework to evaluate the biomass energy technologies being developed under Gas Research
Institute program; and determine the relationship between energy use and water use in the agricultural sector.
FARM Systems Lab
The FARM Systems Lab was created in 1980 to provide academic support to analyzing the impacts of the changes occurring in Florida's agriculture. The long-term objectives of the FARM Systems Lab are to: acquire and manage primary and secondary data to facilitate the management of Florida's agricultural resources; develop computerized analytical systems to help solve current and emerging problems in agricultural and resource management; provide analyses of the impact of current and future trends in regulation, resource availability, and input costs on producer's decisions and the future of Florida's agriculture; deliver computer technology and analyses to producers, extension personnel, and policy makers to assist them in making decisions; and provide support for teaching programs designed to educate students on the use of computers.
The short-term goals of the FARM Systems Lab reflect specific
activities planned for the next couple of years, including development of computerized agricultural management software to assist farmers, ranchers, and growers in decision making. Special emphasis will be given to the development of software for micro-computers and for delivery over the IFAS network. Existing computer software will be acquired and modified to reflect'Florida conditions (e.g., Iowa State University's estate planning package, Oklahoma State University's linear programming package, Michigan State University's recordkeeping-investment analysis package, etc.). The existing budget generator and cash flow analysis model will be modified for use with citrus, sugarcane, and other crops with multi-year
planning horizons. Assistance available through the. FARM Systems Lab will be publicized by publishing a newsletter and holding training sessions to assist Area Extension Specialists, County Extension Agents, producers, and others in using the available computer routines to generate budgets, cash flow analyses, energy use summaries, and other information upon which economic decisions may be based. The Lab will also assist research projects related to agricultural and resource management and decision making (e.g., dairy survey and interdisciplinary management modeling project) and give students "hands-on" experience with computerized decision tools.
The era of computerized decision making in agriculture is imminent. Private ownership of micro-computers is rapidly increasing and the IFAS computer network is nearing reality. The existence of this computerized capacity for information management, analysis, and delivery will be an essential ingredient in helping agriculture adjust to the many and varied pressures facing agriculture in the 1980's. However, the mere existence of hardware will not solve the problems. A concerted effort to acquire, modify,.develop, and deliver software for use on micros and the networkis essential if the hardware is to be used effectively to help agriculture adjust. IFAS should follow its own lead in establishing the network by placing special emphasis on the development and delivery of software.
Macroeconomics and Agriculture
There has been a fundamental change in the nature and character of the agricultural economy. There is now increased integration of Florida and U.S. agriculture with the world economy, abandonment of the Bretton Woods system of fixed exchange rates and the adoption of a floating exchange rate regime, increased foreign competition, and interdependence.
We now have less U.S. government interference in domestic commodity marketing and much more volatile commodity prices. Both greatly increase risk for the U.S. and Florida farmers. General economic policies of the U.S. and other major countries are now more important to the welfare of U.S. agriculture and rural people than agricultural specific or commodity policies. As a consequence, attention to major monetary and fiscal policies may provide more effective methods of promoting the economic well being of agriculture than the traditional emphasis of working only
within the agricultural sector on biological and physical research and commodity programs.
The Food and Resource Economics Department recognizes this growing importance of macroeconomics and is prepared to increase its research involvement in the international and domestic areas to better understand the effects of U.S. and international monetary and fiscal policies on the world's financial accounts and how these, in turn, affect agriculture in the U.S. and Florida--particularly if adequate additional funds are forthcoming.
Quality of the Environment and Recreation
*There has been a tendency for IFAS and FRED to evaluate the supply and production efficiency side of Florida's natural resources, almost
ignoring the consumptive use of natural resources and the research aspects of the demand side. Of course, much of Florida's attraction to new residents and tourists is due to the present quality of its natural resources, such as fresh water lakes, rivers, beaches, campgrounds,
forests, and air. A recent article in Sports Illustrated (February 9,
1981)9 "There's Trouble in Paradise," indicates the importance of the quality of our natural resources to many people.
Because of the.expected increase in both urban and agricultural growth during the decade of the 1980's, it is important to develop empirical measurements of the economic demand for recreational activities and to analyze the effect of this competition for our natural resources. It is also important to estimate the impact of a possible reduction in the quality of Florida's natural and environmental resources upon the general economic welfare of the State. There is also a specific need to determine the economic importance of Florida's marine recreation industries and to provide location specific studies of the demand for marine recreation services'. such as marinas, boat ramps, fishing piers, and beaches. Small Farms and Farming Systems
Recent studies have shown that U.S. food production is becoming more and more concentrated, and the survival of the small to medium-sized family farm is in serious question. We need to understand survival strategies of small farmers to see if the rules or plans that once kept the small farmer in business will still work and to attempt to develop new survival strategies which could help the small family farm survive in the last decades of the 20th Century. Research in this area will look at changes in farmers' decision rules, as they attempt to adapt to a highlychanging environment. Specific short-range efforts are to initiate surveys with farmers to identify survival strategies; focus study on the reasons and circumstances causing farmers to become financially overextended; analyze farmer's plans, strategies, goals, and roles to identify their
interaction with survival strategies; and develop models to test the adaptiveness of alternative survival strategies.
Long range goals are to study the small farmer's recognition and understanding of structural change in U.S. agriculture and to relate farmers' "survival" strategies in Florida with so-called "adaptive" strategies that have been observed in the traditional agricultural systems of many Third World societies.
Closely related to research plans for small farmers is the multidepartmental Farming Systems Research and Extension program which relies on nearly all agricultural disciplines--particularly economics, agronomy, and animal science. The primary research mission of the FSR/E program in Florida is to generate technology designed specifically for the conditions of small, usually diversified, and frequently part-time farmers in the State of Florida who are not fully being serviced by existing research and extension efforts that are oriented more toward the problems of larger, more commercial, and frequently specialized farms. Although the amount marketed by these small farmers represents a relatively small portion of the State's agricultural sales, by number they represent a large portion. Approximately 75 percent of the farms in Florida grossed no more than $20,000 last year.
Overall, the problem of the small farmer is a problem of poverty and underemployment. Appropriate production technology and marketing methods can help some farmers, but the total package of assistance must include a broad range of public service programs ranging from off-farm job creation and human resource development to welfare programs for those unable to earn a socially acceptable living. A strong program of research in problems of poverty and underemployment must undergrid a small farm program.
Water Quantity and Quality
The research agenda regarding water quantity and quality is highly significant for the 1980's and quite demanding. Along with energy, the water resource problem sets limits on the future welfare of Florida's agriculture. Some of the major research topics for the Department's natural resource economists are as follows: determine the economic value of water used in the agricultural, industrial, recreational, and residential sectors, and develop water use projection capabilities; quantify the costs of water supply in the agricultural sector; evaluate alternative water allocation approaches; develop a systems model for combining water supply and demand information; analyze the structure of water quality decision making; examine alternative institutional arrangements for bringing about water quality improvements for larger agricultural areas such as watersheds; evaluate how agricultural producers will and can respond to alternative types of environmental and water-quality-quantity legislation; and evaluate the structure conduct and performance of water institutions
in the State of Florida as to their effects on the agricultural sector and the benefits produced for society.
RESEARCH THEME FOR THE 1980's
The Food and Resource Economics Department has adopted the
"Agriculture in Transition" theme for the 1980's. While adjustments have occurred in the past, the decade of the 1980's will involve an unprecedented set of complex factors which will require the highest level of technical economic analysis. Some of the factors that will contribute to dramatic adjustments in Florida's agricultural sector in the 1980's are as follows: increased integration of Florida agriculture with the international economy and the resulting increased instability of product prices; relatively higher energy prices; and continued growth and development of Florida's urban society and the resulting increased pressure upon land, water, and environmental resources. All of the above factors increase the complexity and uncertainty for decision making for Florida's agricultural producers and make the 1980's a difficult period for the management of Florida's agricultural and resource systems both from the perspective of the individual producer and for society.
IMPLEMENTATION OF RESEARCH PLAN
Existing Programs and Projects--Process and Criteria for Review, Revision, and Termination
The Food and Resource Economics Department has developed over recent years procedures for reviewing, revising, and terminating existing programs and projects. The Department's Research Committee reviews the status of
individual research projects. Departmental research programs, defined to include one or more projects and activities in a sub-discipline, are initially reviewed by appropriate workgroups. There are currently workgroups active in the following areas: production/farm management, marketing, community and rural development, natural resources, econometrics, international development, FARM Systems Lab, and Farming Systems. Each workgroup provides a vehicle for the discussion and development of programs that coordinate research, teaching, and extension activities. Finally, Department program decisions are made by the Executive Council, a body which includes appointed representatives of research, teaching, and extension functions, plus several elected members. The Executive Council is chaired by the Department Chairman. One of the major roles of the Executive Council is to establish program priorities, including the termination of certain programs.
New Programs--Process and Criteria for Review, Revision, and Termination
The Departmental procedures for developing new programs parallel
closely to the management of existing programs. Individual faculty are encouraged to develop new project proposals on the basis of careful review of priority research needs. These projects may be entirely new or merely "contributed" projects to an existing Experiment Station project. Project proposals are reviewed internally by the Research Committee. Each workgroup is actively involved in program planning and the Executive Council establishes the final set of priorities for new programs. A conscious attempt is made to integrate grantsmanship into the goals and objectives of the Department and IFAS.
One of the most serious resource constraints to faculty productivity and morale is the poor and inadequate physical environment for faculty and staff. There is inadequate space for faculty, career service staff, faculty and staff on grants, and graduate research assistants. Deplorable is the fact that the Department has no reading room or Departmental Library, inadequate storage area for publications and supplies. No teaching laboratory area for computer equipment, no assembly and distribution area for handling incoming and outgoing mail, and woefully inadequate space for graduate research assistants.
Equipment needs are largely for micro- and mini-computers, computer terminals, and related computer equipment. Specific equipment needs are identified in the reports of the various workgroups.
.Personnel Needs--Faculty and Career Service
The overriding need of the Department is additional career service positions in order to maximize the productivity of the existing faculty. The career service needs fall into the following three categories, in order of priority: (1) secretarial and clerical; (2) research associates; and (3) scientific or computer programmers. A minimum of six additional career service positions for research support are needed.
In terms of faculty positions, at least three additional research
oriented positions are needed, i.e., legal-economic research and extension programs, production/farm management problems in South Florida, and policy analysis and forecasting. Review of prospective faculty retirements over the next decade reveals two research oriented positions, i.e., those of W. W. McPherson and Cecil Smith. Continuing a Graduate Research Professorship in international development and U.S. policies is a high priority concern of the Department. Whether Dr. Smith's position in the ornamental
marketing area should be continued will depend upon faculty assignments at the time of his retirement. This position is, however, open for discussion and debate as to future direction.
In relation to the size and quality of the research faculty, there is a great need for additional graduate assistant support. An increase of 10 one-third time graduate research assistants in FRED, for example, would still leave the Department with less than one one-third time graduate research assistant for each budgeted research FTE. Facility Needs
The single most critical resource restriction is inadequate physical space for the presently budgeted faculty, graduate assistants and staff. The Food and Resource Economics Department, with over 200 full and parttime employees, desperately needs additional space. Space is needed for offices, laboratories, supply rooms, and a Departmental library/reference area. Our situation is so desperate and critical that the Department will have no option but to decline new grants which obligate space for additional faculty, staff and graduate assistants.
The Comprehensive Review Team in 1976 pointed out in their report
that "the space problem is currently acute ... (and) almost any temporary relief would appear to be welcome." According to information compiled for the Comprehensive Review, we were only assigned 43 percent of the space we generated by the Board of Regents formula in 1976. Although we did receive some of the space the Fruit Crops Department formerly occupied in McCarty Hall, our growth in permanent faculty and career service personnel and staff working on grants has exceeded the additional space made available to us. Consequently, we are in worse shape now than we were at the time of the Comprehensive Review.
There may be some erroneous views prevailing in IFAS regarding FRED's increase in space when Fruit Crops moved out of McCarty Hall. However, we gave up six rooms in Rolfs Hall. Therefore, our net increase was only six rooms (a net gain of 1016 square feet of space), not 12 rooms as some may have argued.
To accomodate some of the growth in our staff, we have converted 1094 McCarty into seven small offices. This was a fairly large room that was used by 13 graduate assistants. In order to convert this room into individual offices, we had to move these graduate assistants out and crowd them into Buildings 851 and 162 with our other graduate assistants. In many cases, we have two graduate assistants sharing the same space. We need additional space where our graduate assistants can do their research.
Several of our faculty members have obtained grants that bring in additional resources. These grants also often involve hiring additional personnel. A good example of this is the USDA grant on "Legal Aspects of Pesticide Use and Impact Assessment Reports" with James Wershow (Food and Resource Economics) and Grover Smart (Entomology and Nematology) as the principal investigators. This grant has involved hiring one post doctoral fellow (with Ph.D. and J.D..), several legal students, one legal secretary and a couple of other professionals for short periods of time. FRED has had to supply all of the space for these people to work (we have allocated our space in the modular unit to them).
In a number of our courses we are attempting to provide applied
learning experiences for our students. This involves practical problem solving exercises using data and computational aids. A teaching laboratory in which these exercises would be administered is needed. We are currently
attempting to administer these activities out of secretarial and Professor's offices. Their offices are inadequate for lab use and this type of activity with many students coming in is disruptive to other activities. The conversion of G108 McCarty to a teaching lab as we proposed this past summer would allow us to make more efficient use of our existing space.
The Department obtains publications and research materials for use by the faculty in carrying out their functional -responsibilities. Because we have no reading room in which to house this material, some of it gets lost or misplaced. We also have inadequate space for storage of office supplies and files.
The Department currently generates several times as much space (by agricultural standards) than is assigned to it. If space requirements are calculated on the basis of SUS standards for business, law and mathematics, the Department generates approximately twice as much space as is currently assigned to it. When any additional space becomes available (such as a new modular unit or when Animal Science moves to their new building), it is critical to the programs in Food and Resource Economics Department that additional space be assigned to the Department.