What does the future hold for agriculture?

• Author: Avery, Dennis

BUSINESS AS USUAL for American agriculture isn't usual any more. The domestic market for farm products is shrinking instead of expanding. The U.S. has a stable, aging population that is shifting from bacon and eggs to oatmeal. It takes fewer and fewer acres of farmland to supply the nation's food and fiber.

U.S. corn yields increased by half a bushel per acre per year in the 1930s, but are rising by two bushels annually in the 1990s. Artificial insemination was adding a steady two percent per year to milk production per cow even before bovine growth hormone. The strongest trend in world agriculture is rising productivity per acre, per animal, and per person, Advances in biotechnology will ensure that productivity trends rise, instead of falling. Neither U.S. agricultural exports nor international farm trade have increased significantly since the end of the OPEC oil boom in 1982. While the world's consumption of farm products keeps rising, there is a strong global trend toward national food self-sufficiency.

In the past, American farmers haven't worried that much about export sales because Congress promised to take care of them. Today, however, the Federal deficit has thrown farm subsidies into head-on competition with programs like Medicaid. The word inside the Washington Beltway is that the Congress gradually will shrivel farm payments. There also is a likelihood that the Clinton Administration sees the farm problem as mainly "rural relief' and may want to tighten further the payment limits for big farmers. The trend in U.S. farm programs almost certainly is downward.

Many farmers worry a great deal about the future of the family farm. Nevertheless, the family farm is the success model for the entire world. Communal, state, corporate, and socialized far have been dismal failures. The worldwide trend in farming structure today is back to the family farm.

The world must be ready to triple the output of its farming resources during the next few decades. Population will double before it levels off again. In addition, billions of people in Asia who do not eat well are gaining the higher incomes to upgrade their diets. To meet this demand, the U.S. has the biggest competitive advantage in agriculture. It has the climate and the cropland, cleared and ready. The land is served by the world's best infrastructure and the best-trained farm managers.

If international farm trade barriers were removed, it is estimated that U.S. farmers could earn an extra $50-70,000,000,000 per year from selling more commodities overseas at higher prices. They could count on roughly a 20% increase in global farm prices due to the...