Social critics have taken aim at modern production agriculture using a common theme: many food, health, and environmental problems are explained by corporate farms, agribusinesses, and fast-food restaurants failing to account for the full costs of their actions. How accurate is this diagnosis? How feasible is the assumption that these externalities are most effectively mitigated via Pigovian taxes and subsidies? Drawing on my experiences at a National Institute of Medicine meeting on the subject, I seek to clarify the definition and nature of externalities and discuss situations in which public policy is most and least effective in efficiently making “hidden” costs of food visible.

When the modern era of environmental policy began with creation of the Environmental Protection Agency and passage of the Clean Air and Clean Water Acts, economists and economics were little used. Over time, economics became a major contributor to formation of environmental policy. Executive Order 12291 pushed economics into the policy process but also rendered benefit-cost analysis controversial. I report on economics’ role in the policy process over time and examine contributions by economists to environmental policymaking. Advancing benefit-cost analysis is an obvious contribution. I describe other areas in which economists have contributed and highlight milestones for economics at EPA.

The seafood market has changed substantially in recent decades, becoming increasingly globalized. This has led to introduction of new species and new sources of fish in most markets. We estimate a seafood demand system that, unlike models in previous studies, accounts for potential structural shifts caused by these market changes. We investigate the impact of tilapia as a new species and China as a new source on demand for imported whitefish in the United States. The results indicate that price flexibilities change substantially over time and that the structural shift takes place over a prolonged period.

Agritourism is an alternative source of farm income. We examine farmers’ participation in agritourism activities to assess the impact of participation on farm household income and return to assets using a large farm-level survey. The results reveal that older, educated, and female operators are more likely to participate in agritourism. However, government subsidies and the population of the county are negatively correlated with agritourism. Of the types of farm operations examined, small-scale farms that involved agritourism generated the greatest household incomes and returns to assets. For operators of small farms, agritourism can boost the economic well-being of farm households.

Policymakers are concerned about nitrogen and phosphorus export to water bodies. Exports may be reduced by paying farmers to adopt practices to reduce runoff or by paying performance incentives tied to estimated run-off reductions. We evaluate the cost-effectiveness of practice and performance incentives for reducing nitrogen exports. Performance incentives potentially improve farm-level and allocative efficiencies relative to practice incentives. However, the efficiency improvements can be undermined by baseline shifts when growers adopt crops that enhance the performance payments but cause more pollution. Policymakers must carefully specify rules for performance-incentive programs and payments to avoid such baseline shifting.

Farm-to-hospital (FTH) programs can potentially improve the economy of local communities and preserve the environment. Research on adoption of farm-to-hospital (FTH) programs is extremely limited in the agricultural and applied economics literature. Using data from our 2012 regional FTH program survey of hospital food-service directors in the Northeastern United States and from the U.S. Department of Agriculture, this study estimates a logit model to determine factors that influence a hospital's decision to adopt an FTH program. The empirical results indicate that specific hospital characteristics and agricultural factors significantly influence a hospital's decision to adopt.

Consumers in today's marketplace have seemingly endless choices with regards to produce. Peach growers and retailers in Ontario, Canada, have begun taking steps to increase demand for their products. This study investigates the impact of those strategies on the market. Using conjoint analysis and market simulations, we evaluate the peach market to identify key drivers of peach purchasing. The results indicate that the market is heterogeneous and that price, origin, and quality indicators are the most important drivers of purchases. Our simulations indicate that adoption of new plastic packaging by the industry is a viable strategy for increasing demand for local peaches.

We analyze the rate of survival of hybrid seed corn in the U.S. market between 2000 and 2007 and find that product characteristics and market structures have significant impacts. The results suggest that survival rates depend on spillover effects of learning regarding genetically modified seeds and close substitute seeds and that hybrids planted in the Corn Belt survive longer in the market than hybrids planted in other parts of the country. Given increasing concentration in seed and agricultural biotechnology sectors, our results shed light on factors that affect the survival of hybrid corn seeds under various market conditions.

Ever more agricultural economics departments are offering appointments for nine rather than twelve months but little if any analysis of the impact of this change has been done. Our research shows that converting to nine-month contracts is an effective way to raise salaries without an initial outlay of new funds and thus meets the retention criterion. Lower ranks do not suffer significantly lower salaries (without supplements) and professors earn more. Because the nine-month alternative costs more, justification for converting all twelve-month faculty members must rest on other factors, such as enhanced grants or comparability.