Perspective is very important in understanding the area of food safety. This importance is illustrated by a favorite cartoon of mine that features an older, experienced mouse giving advice to a young mouse. The older mouse, in wrapping up, says to the younger, “… and stay away from scientists—they cause cancer.” Facing an avalanche of information on links between diet and health, consumers may, in frustration, sympathize with the mouse's view, and are having some difficulty sorting out which are the important cause-and-effect relationships. Government and industry also are struggling to develop a coherent approach to food safety and nutrition.

Canadians enjoy the highest possible level of food safety. Despite this fact, there is a public perception and concern about the potential presence of chemical residues in foods and the possible presence of bacteria, such as salmonella and listeria.

The food processing industry is Canada's second-largest manufacturing industry. It employed 226,579 people in 1986, and shipments were valued at CDN $47 billion, or 15 percent of the value of total manufactured output that year. More significantly, the food and beverage industries together ranked highest among all manufacturing industries in terms of value added, at CDN $15 billion or approximately 14 percent of total value added in Canadian manufacturing industries in 1986 (Statistics Canada). Given the high degree of competition in this industry in the United States, the history of “comfortable” competition in the food industry in Canada, and the significant contribution of this industry to the Canadian economy, it becomes important to look more carefully at how this industry has been and will be affected by the Canada-U.S. Free Trade Agreement (FTA).

On January 1, 1989, the much-heralded—or much-maligned, depending on which side of the border you sit—U.S.-Canada Free Trade Agreement (FTA) went into effect. With only a year and a half under its belt, the FTA continues to generate discussion and debate in Canada, as it has ever since Prime Minister Mulroney proposed the idea at the “Shamrock Summit” in 1985. The FTA is actually generating some columns in the U.S. press as well. Agricultural and natural-resource topics remain prominent in U.S.-Canadian trade issues.

A long-term whole-farm analysis compared conventional and low-input farming systems. Data from a nine-year agronomic study at the Rodale Research Farm, Kutztown, Pennsylvania, were used to analyze profitability, liquidity, solvency, and risk on a representative commercial grain farm. Conventional and low-input farms participating in government programs are the most profitable scenarios, followed by conventional and low-input farms not participating in government programs. All farms increased their net worth. The low-input approach is advantageous for risk-averse farmers using a safety-first criterion.

Binary logit and bivariate probit models were used to investigate the investment behavior of farmers relative to two energy-conserving assets, heat-recovery systems and precoolers. The bivariate probit procedure was useful in correcting for self-selectivity bias. Holdout samples and cross-validation procedures were used to develop true model statistics. Farm size, educational level of the operator, and the type of milking system in use were the important factors influencing investment behavior.

This paper develops a logit-based conjoint analysis of willingness to pay for individual attributes of deer-hunting trips. Since deer-hunting success is uncertain, willingness to pay for enhanced likelihood of bagging a deer, rather than for certain success, is evaluated. Implicit costs of recreational travel time are also evaluated from hypothetical trade-offs between travel time and trip expenditures. The valuation of travel time derived here appears to reflect more the opportunity cost of foregone hunting than the opportunity cost of foregone work. This implies that travel-cost analyses of recreational demand, which impute costs of recreational travel solely from wage data, can yield biased valuations of recreational amenities.

The use of conjoint analysis in assessing consumers’ preferences for attributes is demonstrated with the apple as an example. Conjoint analysis may be used to estimate the importance of attributes and attribute levels through decomposition of consumers’ ranking of alternative attribute combinations. It is shown that conjoint analysis provides results that may not be obtained from a survey where respondents are asked to directly state their assessment of the importance of attributes.

A variety of questioning formats have been used in contingent-valuation studies, with dichotomous-choice questions becoming the preferred format. However, as with any empirical technique, continued applications raise questions that require attention if the credibility of the procedure is to be maintained. It is shown that estimated Hicksian surplus can be substantially affected by the selection of a functional form when analyzing responses to dichotomous-choice questions. Given that theory, intuition, and empiricism all play a role in developing these estimates, several maxims are suggested for evaluating and/or mitigating such effects in future studies.

A disaggregated econometric model of the agricultural sector at the state level is constructed. Using time series data on West Virginia agriculture and three-stage least squares in estimation, the model is employed to examine how various components of the state's agricultural sector adjust to changes in certain price and nonprice variables. Results reveal characteristics of the state's agricultural economy that are both unique and useful—characteristics that are usually masked in aggregate models but that have profound implications for modeling producer decision making and policy formulation.