During the past six years, state-local government finance ranged from a situation of fiscal crisis in 1970, to a boom in 1972-73, and back to a crisis in 1974-75. This was far worse than any since the Great Depression. During the recession of 1970-71, rising state and local tax revenues and federal grants did not keep pace with increases in expenditures resulting primarily from inflation [21, p. 500]. More favorable conditions in 1972-73, though, saw researchers projecting large future surpluses for the remainder of the decade and calling for reductions in tax rates and increases in expenditures [11, pp. 364-366].

Drs. White and Musser bring an important new insight: given recent and prospective variations in inflation and income growth, stability must become an important criterion for assessing alternative local and state government fiscal systems. The 1960s was an expansionary period for U.S. and world economies. Equity, growth and efficiency appeared to be appropriate and sufficient criteria for evaluating local and state tax and expenditure systems. The economic turmoil of the 70s, however, makes it obvious we were a bit over-optimistic. Stability must be added to our list.

This paper consists of two parts. The first is a general view of the consequences of recession, with reference to historical U.S. business downturns. The second considers more specifically the effect of rural industrialization on the sensitivity of the rural economy to general business conditions. Attempts are made to estimate effects of rural industrialization during the 1974-75 recession.

It will probably be useful to trace the evolution of the title of this paper. Initially, the assigned purpose of the paper was “to contrast the impact of a recession on rural areas having industrial development with those that have not attracted additional industry.” The program title became “The Effect of a Recession on Employment, Population and Industrial Development in a Rural Economy.” My first review draft of the paper carried the title “Effects of General Economic Conditions on an Industrialized Rural Economy.” One week preceding the meetings, I received a revised draft of the manuscript, title “The Effect of Recession on the Rural-Farm Economy.”

Adjustments in the distribution system, as rapidly and as consistently as they occur, seldom fail to elicit substantial emotional reaction. Linking the production system with the consumption system, the distribution system is extremely pervasive. Small changes have widespread effects. Thorough, objective analysis of these changes is difficult and vulnerable, especially when public hearing procedures provide little time for intensive study.

Dr. Johnson has presented a useful description of the process by which judgments are reached, with regard to impacts of transportation infrastructural changes. I will make only a few suggestions for your consideration that relate specifically to his paper, and then devote some comments to the nature of future changes in transportation likely to be most important in the South.

In recent years, increased attention has been focused on understanding graduate education in agricultural economics. The profession's interest in this area has been demonstrated through sponsorship of workshops on curriculum development, improvement of undergraduate instruction and teaching programs in agribusiness. Creation of an AAEA Distinguished Undergraduate Teacher Award, establishment of sections of the annual meetings devoted to teaching and curricula, and opening of the contributed papers section competition to undergraduate students all represent increased recognition of undergraduate education.

This paper is another of many that looks into a hazy future. The overall purpose is to identify some possible departmental strategies for the agricultural economics profession. These strategies follow from a discussion of the status of higher education, a review of findings from the Carnegie Commission reports, and from a study on alternative organizational structures—particularly institutes and centers.

Strategies for the next decade relate to a serious set of issues particularly crucial to social science departments within universities. The issues seem related to clarifying the role of agricultural economics, to increased linkage of professional and political decision types, to greater balance of theory and empiricism on complex societal problems, and to increased concern for indirect effects of scientific and technological developments.

Professor Coutu is to be commended for synthesizing in a brief paper a great many insights bearing on the management of teaching, research and extension in the next decade. As a discussant, I feel much as a blind man trying to describe the Taj Mahal—I can only reach so high. The future is as yet unknown and any predictions are at best pretty wild guesses. But there are insights gleaned from the past that can guide us in anticipating the future.

In developing his anticipations, Professor Coutu drew upon several important sources of information, including his personal observations on the status of the university, his recent research on organizational structures used by the University of North Carolina system to manage research, and the Carnegie Commission report on higher education.

As a result of the recent world food situation, particularly the problem of repeated production shortfalls, the precipitous drawdown in grain stocks and the rapid increase in grain prices, widespread concern has developed over instability in food supplies and prices. Government officials and heads of international organizations have given considerable attention to stabilization measures, particularly grain reserves, as a means of offsetting fluctuating supplies and unstable prices of basic foodstuffs.

For the United States, the problem of fluctuations in grain prices and unstable markets is not one of domestic origin. At recent levels of production, grain supplies have always exceeded domestic needs in the past two decades. Wheat is a good example. U.S. exports of wheat as a share of domestic production went from about 40 percent in 1970-71 to about 70 percent in 1972-73. In recent years, U.S. overseas markets have been the main source of instability in grain prices. Instead of reducing grain consumption or relying on their own grain reserves, many foreign countries experiencing shortfalls in grain production used the world and U.S. markets to purchase needed supplies.

The South plays an important role in American agriculture in that it is a major supplier of several commodities. However, due to relatively low yields, the region is a marginal producer of some important farm commodities grown in the United States. Given this constraint, the South still offers the greatest potential for expansion of agricultural output of any region in the country. The purpose of this paper is to evaluate this assertion. A rather broad perspective with implications for future research is provided.

Environmental and resource quality recently have become special public concerns. A few states have already enacted legislation posing land use-environmental restrictions. Vermont, Hawaii, Colorado, Maine, Massachusetts and New York, passed land use laws. Illinois formed a Pollution Control Board to quantify nutrients and sediment polluting streams and suggest action. In 1971, the Iowa Legislature passed the “Conservancy District Act,” creating soil conservancy districts “to preserve and protect public interest in soil and water resources for future generations.” Legislation centers on soil erosion and sedimentation. Erosion is declared a nuisance if it results in siltation damage. The law sets allowable soil loss limits on land at one to five tons per acre per year, depending on soil type.

The primary purpose of this paper is to provide estimates of the government subsidy that would have to be paid to wheat producers if Bolivia is to reach self-sufficiency in wheat. These estimates are then utilized in a producer's surplus analysis to determine whether or not such a policy would enhance the economic welfare of the country.

Bolivia has a chronic deficit in wheat production. Imports composed about 80 percent of consumption in 1971, the last year of our data series (Table 1). Domestic production in 1971 was roughly the same as 14 years earlier, while imports have steadily increased. A linear regression of imports on time revealed an annual increment of imports of 7,748 metric tons (MT), whereas total annual consumption increased by 8,833 MT. (Thus increases in imports have supplied about 88 percent of the estimated increases in consumption.) Requirements of foreign exchange for wheat purchases have been heavy, especially as Public Law 480 concessional sales have been winding down and Bolivia has had to turn to purely commercial transactions to satisfy her consumption requirements.

Consumer acceptance of Choice, grain-finished beef has been attested in millions of American homes. Abundant feed grain and feeder calf supplies has made it possible for almost all Americans to purchase and consume feedlot beef.

Consumer acceptance of any product, however, can be changed when input substitutions in production are made. For various reasons, livestock producers may feel justified in changing inputs before analyzing an effect on the product or its demand. An example of input substitution occurred in mid-1974, when some beef producers began to market beef for slaughter directly from forage (or limited-grain) diets rather than after normal full-grain feeding. Consumer acceptance of forage-finished and limited-grain finished beef was uncertain at that time, particularly among customers of large supermarkets accustomed to Choice grade beef.

Use of peanuts in edible products is expected to increase five percent in 1975-76 to 1.9 billion pounds. Despite the increase in consumption, supplies are well in excess of edible requirements. The 1975-76 peanut supply is estimated at a record 5.0 billion pounds, about 20 percent above the previous year. Surplus production is an increasingly important problem for the peanut sector. Total peanut production has doubled since 1960, although planted acreage has been restricted by the peanut program to a maximum of 1.61 million acres. Due to increasing yields, acquisitions by the Commodity Credit Corporation have increased from 17 percent of total production in 1960 to 30-35 percent in 1975.

Accurate estimations of recreational demand schedules are important for projecting attendance at new facilities. Projecting future demand levels and calculating social benefits of additional facilities can be biased, however, if an analyst does not consider the influence of recreational opportunities. The Lancasterian theory of household behavior provides a framework for exploring implications of the influence of such recreational opportunities on demand estimations, projections, and consumer surplus measures. A case study of boating demand is presented to empirically investigate this framework.

While many methods have been proposed for evaluating agricultural processing market efficiency, estimation of product marketing margins has received the most attention and direct research effort. Despite this fact, there are many technical and statistical problems associated with both the performance of marketing analyses and utilization of margin reports. Most early marketing margin studies either ignored or circumvented these problems, concentrating on estimating absolute magnitudes of marketing margins over time. Marketing margin studies performed in the last few years have continued, in varying degrees, to ignore these and other problems implicit in the analysis. Relative levels of marketing margins over time may provide some insight into marketing efficiency, but those of various cost components of the marketing margin over time appear to give even more suitable indications of changing market performance.

Farm planning and enterprise selection have been studied by agricultural economists for many years. Detailed methodology has been developed to analyze the economic situation of farm firms and to project optimum combinations of resources used in producing selected enterprise activities. Programming techniques have been used extensively. They provided planning guidelines, with quality dependent on availability of data and completeness of the programming format.

One area of concern arising from many programming efforts is that resource utilization and, ultimately, enterprise selection do not accurately project the general patterns of production observed in a specific area. Furthermore, there is little observable indication that farmers tend to move toward the programming solution. This problem is apparent when more variable enterprises are programmed with traditionally less variable enterprises. The more variable enterprises are frequently indicated to be profitable in the programming solutions, but farmers are not very interested in growing them.

Pronounced short-run movements in production, marketings, slaughter and prices of live hogs create problems of uncertainty in the decision-making process of producers and other participants in the hog-pork industry. The objective of the present study was to develop quarterly prediction models for live hog prices, based on structural relations representing the price-determining forces in the sector.

The relative importance of the hog sector in the livestock industry is underscored by the fact that the annual cash income for the sector ranks second to beef. For instance, in 1970, hogs accounted for about 15 percent of the total cash receipts from all livestock products. About one-half of total hog production in 1970 was in the seven states of West North Central Division, with Iowa accounting for almost one-fourth of all hog production in the United States. This division, along with four continguous and six southern states, accounted for about 90 percent of the total U.S. hog production. Although the total consumption of pork has increased over past decades, pork has represented a smaller percentage of total meat consumption. The per capita consumption of pork has shown no appreciable increase since the middle fifties, while that of beef rose steadily during the period.

The Florida citrus industry is in the unique position of being both importer and exporter of frozen concentrated orange juice. On one hand, exports provide the industry with an additional outlet for concentrate. On the other, imports being brought into the U.S. market creates considerable controversy as to whether this imported juice is economically desirable for the industry.

Two basic issues have evolved from these international trading activities. First, Florida exports concentrate on both Canadian and European markets. The former differs little from the domestic market. In contrast, the European market is expected to differ substantially from the U.S. market. Florida faces a number of competing suppliers in Europe. Often, the price of foreign concentrate exported to Europe is priced lower than Florida's export price. Recognizing that competition exists in the European market, how then should Florida price its product relative to the world price? Similarly, should the Florida export price be discounted to the domestic?