ABIZ 3510—Economics of Food Policy
Policy Paper Assignment
Due: April 9, 2019
Pick a recent article from a newspaper (Globe and Mail, New York Times, Wall Street Journal,
etc. or a farm paper such as Manitoba Cooperator, Western Producer, etc.) or a magazine
(Economist, Maclean’s, Canadian Business, etc.). The article needs to have an agricultural or
food policy angle. The article might deal with a policy that is already in place, one that is being
considered, or one that you believe could be implemented to alleviate a market failure. Write a
paper using the tools of economic analysis that you have learned in this class (or others) to
examine the policy.
Your paper should include a short description of the rationale for the policy, the major stakeholders affected by the policy, and an economic analysis of who benefits and who loses due to the policy. Does your economic analysis suggest this policy will succeed? Are there significant knowledge gaps that need to be addressed? Are there foreseeable unintended
consequences of this policy? Are there important “non-economic” factors at play? Keep in mind that this is not an opinion piece.
Top grades will go to papers that formulate original economics or statistical framework using:
1) quantitative supply and demand analysis with assumed elasticities to measure welfare effects
or 2) a simple regression analysis to evaluate the actual or expected effects of the policy.
A few tips:
· Start this project early in the term
· Be concise, organized, and to the point
· Use subject headings to organize flow and emphasize important components of the essay
· Think carefully about claims made by potentially biased organizations
The paper should be no more than 4 pages of text (single spaced, Times New Roman 12 pt font,
1 inch margins). You must also include a page of references (including the article you are
writing about) and any tables or graphs that are a part of your analysis. You must use a consistent
reference style. I suggest following the American Journal of Agricultural Economics style:
Economic Advantage of Smart Agriculture
The field of agriculture is one that has evolved over the centuries from the period of the agrarian revolution up until the current state in which agriculture is more advanced in terms of technology. Agricultural policies, which are essentially laws that are associated with the management of domestic agriculture and the importation of agricultural produce, are used by governments to achieve certain standards of advantages in the agricultural markets. The importance of agriculture in the modern world thus cannot be overlooked even as technology occupies a significant portion of the contemporary setting (Bressler, 1958). The introduction and innovation of technology has led to the use of technology in agriculture. The Agricultural Improvement Act of 2018 sets the foundation for involving modern approaches towards ensuring food security. Future of Agriculture article in the Economist (2016) under the Technology Quarterly segment highlights the potential of technology being adopted independently in agriculture to advance food security for future generations and in essence also alleviate the current state of market failure. Technology use in agriculture has emerged as the new trend and policy that is incorporated and advanced in modern day agriculture. It is referred to as Smart agriculture following the fact that various forms of technologies continue to be employed in the field and with the advancements in technology; the approaches to agriculture also continue to change. This paper hence seeks to advance the nature and the advantages of Smart agriculture with the adoption of technology in agriculture as a means not only to assure of food security but also as the measure taken to improve the economy of the agricultural sector.
Rationale of Policy
Smart agriculture primarily looks into incorporating various technologies in the field of agriculture. Ideally, the article highlights Smart agriculture policy and the various technologies that are already in place. In understanding the impact that technology can have on agriculture, a variety of methods have been developed to ensure that the future of agriculture is secured. Practically, the incorporation of technology in agriculture began with the consideration of the tools that are used to simplify agricultural work (Demont, Erik, and Tollens, 2001). Basically, the overall perception of technology in agriculture is based on the nature of tools of trade that are used.. However, aside from the infrastructure that is incorporated in agriculture, there is the consideration of the ‘liveware’ that is under heavy research in the current society. The liveware ideally constitutes looking into the DNA and genomes of plants and animal cells and thus determine the type of qualities that are relevant. Based on the researches that have been conducted by the various scholars in the field through the study of plant genomes, it is bound to make it possible for crops to grow on their own without the continuous period of having to plant the seeds and wait for the crops to germinate It is through the incorporation of Smart agriculture that the assurance of food security on an international level is made possible.
Stakeholders to the Policy
The Smart agriculture technology is one that has been pioneered in the developed countries before its spread to the developing world. The main people who are concerned and duly affected with the advancement and continued use of technology in agriculture include the farmers, the government and the consumers who are essentially the primary targets of the market. The farmers in this regard are the primary users of the technology in their agricultural practice. In essence, their application of the various technologies enables the farmers to improve on the quality of food that is produced and in turn benefit the overall market in terms of secured productivity.
The government, on the other hand, is a significant stakeholder in terms of benefiting from the revenues that emanate from the agricultural industry. However, most importantly is the fact that through the smart agriculture policy, food security is given priority and the government is able to channel resources significantly towards developmental goals in other sectors. In addition to this, the government is also a key provider of access to the relevant technologies that are feasible for the farmers to use in their activities.
The consumers are the market to which the agricultural produce is sold. In the absence of the consumers, the essence of smart agriculture as a policy loses its grounding. This is such that, smart agriculture as a policy is set up to ensure that the consumers have continuous supply of food and that food security is enhanced for future generations. Hence, as one of the primary stakeholders, the demands of the consumers have to be met and the supplies have to be constant to avert situations of hunger crises.
Economic Analysis of the Smart Agriculture Policy
The agricultural sector is among the many that contribute to the economic growth of a country’s gross domestic product. The revenues realized from the sector are usually high due to the fact that food is a basic need and its continued supply is mandatory for the survival of humanity. Primarily with the presentation of food security, the world’s population is bound to grow and expand. This is one of the main reasons as to why smart agriculture is bound to be an approach in food policy that will ensure that the world’s population is continuously fed.
The main benefactors to the smart agriculture policy are the consumers and the farmers. This is such that, through the policy, farmers are able to utilize modern technological methods in their farming and thus enable them to save costs on some processes and resources such as irrigation in which, the conventional methods would have the farmers use more water compared to the regulated and yet sufficient technological means of watering the crops (Zappa, 2014). Resources that would have been put to waste as a result of the lack of better mechanisms would thus be saved and the environment would benefit in the long term. Further, through smart agriculture, farmers can easily use tested genomes and of specific kinds to produce the type and quality of crops and animals bred of their liking. This is made possible through the structural study of the animal and plant DNAs and genomes thus enabling farmers to have their produce to their liking and expectations of the consumers (Frangoul, 2018).
The consumers are the next benefactors as, through smart agriculture, their demands are met with constant supply of food and of top quality. In this regard, the populations are assured of food security due to the various methods that are applied to facilitate for continuous food supply. The high supply of food thus will attract affordable prices due to the availability of the produce. In the long term, the consumers will have access to top quality and affordable access to food (Scheifer, 2003). Economically, the governments are bound to benefit from the revenues channeled from food production and the use of technology. However, a competitive realm will emerge between the government and the private sector in terms of the provision of the technological devices and machinery to be used in the agricultural field. In this regard, the benefits and losses may be felt by both distributors of technological equipment to be used by farmers.
Will the Policy Succeed?
Based on the current state of affairs in the modern world, the probability of smart agricultural policy to succeed is very high. Among the world’s top agendas is to ensure that a state of food security is achieved globally in a bid to avert hunger crises that have been witnessed in the past. In this regard, the introduction of smart agriculture will serve as an important and efficient approach to achieving the goal of food security (Scheifer, 2003). Economically, the policy provides ample consideration to enabling governments to save more resources that have been used before to counter hunger crises all over the world. Additionally, the relevance of the smart agriculture policy cannot be overlooked. The economies of the world require that the populations are present to enable basic functioning of the economy. Therefore, the policy assures of successful implementation and achievement of global goals on food security and the protection of populations from adverse calamities and crises that have been witnessed in the past with regard to the availability of food.
Knowledge Gaps to be Addressed
The smart agriculture policy is one that is highly promising and serves to ensure that the global population is assured of food security. While the introduction and implementation of the smart agriculture policy is highly practical in developed countries, the same cannot be assured in developing world. This is because availability of technological resources in developing countries and the implementation of the policy may be difficult to achieve. The poverty of the developing countries thus presents a limitation to the achievement of the goal of food security.
Additionally, the ability of developing countries to apply the same technologies as the developed countries is rather difficult due to the fact that the technologies in question are rather expensive not only to acquire but also to maintain (Scheifer, 2003). This is an area of concern that has yet to be looked into conclusively and it would be prudent to put in place better measures and techniques that are affordable for the developing countries to utilize and equally secure their food security and avert hunger related crises and calamities.
The other gap that should be addressed is with regard to the availability and distribution of the equipment that will be used in smart agriculture. Farmers have to be duly trained in order for them to understand how to use the same equipment and thus maximize on utility and their productivity using the technologies. The overall availability and training of the farmers should thus be given due priority to ensure that the goal us advancing smart agriculture is achieved with the farmers aware of what they can do and how to do it right.
Consequences of the Policy
The implementation of the policy may not necessarily be the difficult task. However, maintaining smart agriculture thus is one of the consequences that are bound to be difficult, more so for farmers. Typically, technology is constantly upgrading and therefore, it would be necessary for the technologies in use to be upgraded and even undergo constant maintenance which may be cumbersome and even difficult for some farmers to do. The implementation of the policy would have all farmers using certain standards of technological equipment and the farmers who may be unable to afford the equipment would be subjected to tough competition in the market based on the quality of the produce (Mangstl, 2008). In essence, the application of smart agriculture would not be an immediate factor for all farmers as some would prefer to maintain the conventional methods of farming as opposed to adopting scientific procedures and the use of modern technology. Ideally, this is anticipated so as to maintain a form of organically fresh produce in the long term for some people.
The adoption of smart agriculture is a means of alleviating the financial and economic market failure and, therefore, various factors contribute to its successful implementation. This is inclusive of the non-economic factors such as the political stance on the use of technology and availability of the technology. Politically, it is imperative that the government permits the use of smart agriculture so that it is not a feature that is limited to a few upscale farmers. The government supporting the policy makes it possible for more farmers to have the opportunity at using the practical end of the policy. As such, it is easier to have access to some of the technologies when the government supports the policy as this will set up a platform for the country to acquire the necessary equipment and machinery at affordable prices from allied countries. Secondly, the not all countries are capable of producing the technological equipment. Therefore, majority of the countries will have to outsource or import the machinery and equipment so as to be able to put them to use in their countries. These factors cannot be overlooked as they are at the core of the achievement of the global goal of food security.
The field of agriculture even in the midst of technological developments and advancement remains critical to the survival of human beings and the markets. Primarily, from an economic point of view, the agricultural sector is one that has faced a vast range of challenges in the various markets. Quality and quantity remain to be determining factors towards performance. Subject to this, farmers have to ensure that in their capacity, they are able to meet the standards of competition as well as the demands of the target market. Incorporating technology in agriculture advances quality produce and increases the quantity thus making it efficient n the adoption of policies to alleviate market failure. While it is a policy that is yet to be adopted fully, the technological innovations in agriculture prove to be sufficient and efficient in the sector’s growth. Market performance is bound to improve significantly through the adoption of technology innovations in agriculture as the populations globally get to be benefactors of quality and high quantity food products.
Bressler, R. 1958. “The Impact of Science on Agriculture.” Journal of Farm Economics, 40(5), 1005-1015. Retrieved from http://www.jstor.org/stable/1234965
Demont, M., Erik, M and Tollens, E. 2001. “The Impact of New Technologies on Agricultural Production Systems: The Cases of Agricultural Biotechnology and Automatic Milking Systems. In Ludwig L. ed. New Technologies and Sustainability. CLE-CEA.
Frangoul, A. 2018. “How Technology will Influence the farms of the future and Change the way Crops are Produced.” CNBC August [Online] https://www.cnbc.com/2018/08/22/how-technology-will-influence-the-farms-of-the-future.html
Mangstl, A. 2008. “Emerging Issues, Priorities and Commitments in e-Agriculture”. AgInfo Worldwide. 1 (1).
Scheifer, G. 2003. “New Technologies and their Impact on Agriculture, Environment and the Food Industry.” EFITA 2003 Conference July, pp.3-11
The Economist 2016. “Technology Quarterly: The Future of Agriculture.” The Economist June [Online] https://www.economist.com/technology-quarterly/2016-06-09/factory-fresh
Zappa, M. 2014. “15 Emerging Agriculture Technologies that will Change the World.” Business Insider May [Online] https://www.businessinsider.com/15-emerging-agriculture-technologies-2014-4?IR=T