Land/grant colleges were established to serve the public via a tripartite system of teaching, research, and extension. Agricultural economists have played a key role in this system in meeting agriculture's needs and are expanding this role to better cover the areas of food, natural resources, and the environment. The declining economic importance of agriculture and the growing interest in relegating agriculture to free market forces has resulted in declining formula funding for the land grant system, greater emphasis on competitive funding, demands for greater accountability, and demands for a return to greater focus on public service, problem solving, and stakeholder involvement in the definition of research, teaching, and outreach agenda. Simultaneously, the demand for the traditional “agricultural economics” graduate is declining. This paper reviews the current and long-term issues and trends facing agricultural economics departments, explores the futures of their teaching, research, and outreach programs, and highlights the challenges that will be faced as these departments explore new teaching, research, and service opportunities in the areas of food, natural resources, and the environment. The paper concludes by arguing that for forward thinking agricultural economics departments, these pending changes will represent opportunities for better scholarship, more balance, and more effective service.

The relevance of graduate training in the Department of Resource Economics at the University of Massachusetts is investigated through a survey of graduates. The survey questionnaire and measures of relevancy are discussed. Results are presented for three cohorts: graduates currently in Ph.D. programs, M.S. graduates currently employed, and Ph.D. graduates currently employed. Results for all cohorts indicate that their graduate training is relevant to their jobs; however, all cohorts also favored increased application and reduced mathematics and theory. In addition, graduates suggested the need to bolster graduate training in economics with applied courses in business to improve competitiveness in private job markets.

Though there are many challenges facing extension economists, there are significant opportunities to serve rural America and fully participate in our profession. National studies have reconfirmed extension as an integral part of our land grant mission, and a survey of chairs of departments of agricultural and resource economics shows that 87% indicate that there is increased or constant pressure by the public for programing by extension economists. Retirement estimates provided by chairs suggest it is likely that at least one-half of new faculty hired over the next five years will have extension appointments. Perhaps most importantly, there are critical societal issues to which extension economists can make valuable contributions.

Cooperative extension has prided itself on being the outreach of the land grant university. However, with changes in the structure of the population, the economy, and agriculture in particular, extension has had to change as well. Increasingly, extension service providers are reminded that they cannot be all things to all people. There is also increasing competition from other campus units that feel they have an outreach mission. As traditional base funding sources decline, decisions must be made regarding the role and function of extension within the university system. This paper explores these issues using historical data, reports, and six case studies. The case studies provide insights into the ways different extension services have collaborated and partnered in university outreach. The case studies demonstrate that the role of extension reflects such things as past experiences, the level of support for extension, the administrative structure of extension and the university, and the vision of those within and without the extension system.

Studies of recreation congestion generally utilize nonmarket valuation techniques to determine the use level and entrance price that maximize aggregate recreation benefits for a specific recreation area. This paper improves upon these previous studies by relaxing the assumption of homogeneous preferences among visitors of the same recreation area and accounting for visitor expectations of congestion. The results indicate that failing to account for heterogeneous preferences for congestion by time of visit leads to overestimates of the benefits of relieving peak-time congestion, while accounting for expectations raises questions about the validity of the standard optimal use model.

A survey of more than 1200 Pennsylvania dairy farm managers showed that almost 20% of those managers do not have health insurance. Of those farm managers with health insurance, 67% had insurance acquired through the farm business. Farm characteristics and demographic information were used to determine indicators of health insurance coverage. Age, education, net farm income, off-farm income, milk marketing cooperative membership, and intensity of hired labor use all had significant effects on the likelihood of having health insurance and on whether such insurance was provided by the farm business.

A hedonic cost function is used to isolate the operation and maintenance costs for water treatments. For small systems, costs are substantial for some technologies, but not for others. When regional differences in input costs are accounted for, small systems located in rural areas may have a cost advantage over similar systems closer to urban centers; however, costs of water treatment to meet Safe Drinking Water Act amendments may still be substantial.

Increasing numbers of freshwater ecosystems have had sportfish consumption advisories posted in recent years. Advisories are sometimes issued in lieu of environmental remediation if they are considered more cost-effective than “cleaning up” the resource, but this approach assumes that anglers adjust behavior in response to the warning. Previous studies, however, suggest that compliance with advisories can be quite low. In contrast, this study measures a statistically significant response by reservoir anglers to consumption advisories. In particular, anglers are less likely to choose to visit a reservoir with an advisory than a similar reservoir without an advisory. Furthermore, the economic losses due to advisories are quantified for anglers in two regions of Tennessee.

Contract grazing is compared with retained ownership of cattle using two frameworks—decision theory and portfolio analysis. The study area is West Virginia. Contracting is optimal under a wide range of price and weather scenarios and decision criteria. It also dominates other alternatives based on labor efficiency measures. The optimal portfolio consists of contract grazing and pasture rental, with the results insensitive to small changes in contract grazing returns. The decision theory and portfolio analyses are complementary; together, the two sets of results provide a comprehensive view of the optimal production alternative. Because different agents employ different decision criteria, this approach can increase the utility of results to decision makers and contribute to better decisions.

The interaction of the planting flexibility and conservation compliance provisions from the 1985 and 1990 farm bills was evaluated using an integrated systems model. Results showed that flex and compliance policy in combination reduced net returns and government costs, diluted environmental benefits of conservation compliance, and increased grower responsiveness to market signals, compared with conservation compliance alone. Strict compliance and higher flex levels were the most detrimental to farm income and environmental goals. Decoupling in current and future policy proposals will promote conservation goals. Budgetary reductions in future farm policy could reduce conservation incentives.

Three conjoint models—a traditional ratings model, a ratings difference specification, and a binary response model—were used to value groundwater protection program alternatives. The last, which is virtually identical to a dichotomous choice contingent valuation specification, produced the smallest value estimates. This suggests that the conjoint model is very sensitive to model specification and that traditional conjoint models may overestimate economic value because many respondents are not in the market for the commodity being valued.

This paper outlines a method to determine the tradeoff between economies of size in water treatment and diseconomies of distribution. Cost equations are estimated for several treatment technologies and distribution extensions. Empirical results are used to identify optimal system size where average total costs are minimized. Regardless of treatment, most costs are due to distribution. As water systems expand service territories, only in the most densely populated areas would remaining economies of size in treatment outweigh the diseconomies in distribution.

This paper reexamines supply response in the Northeastern fresh tomato market during the 1949–94 period by employing cointegration and error correction technique. It tests whether there has been a long-run equilibrium relationship between Northeastern production and a set of price and nonprice factors that influence it. Findings suggest that wage rate, imports from competing regions, and urban pressure have had significant negative impacts on regional production. The negative relationship between price and production may have resulted from the strong negative effects exerted by the nonprice factors.