Recipient Organization
UNIVERSITY OF MISSOURI
(N/A)
COLUMBIA,MO 65211
Performing Department
Social Sciences
Non Technical Summary
Each year, the United States spends billions of dollars on agricultural programs designed to affect the income and wealth of farmers and the cost of food to consumers. The underlying policies are complex and the policy debate is often confused by arguments over what the implications of a particular policy may be. Advocates make arguments based on anecdotes and conjecture, and opposing sides often find little common ground for discussion. FAPRI-MU contributes to the policy process by providing objective, quantitative analysis of major issues. FAPRI-MU does not advocate or oppose particular policies but provides information that can be used by all. One of the key roles FAPRI-MU analysis plays is to help identify a wide spectrum of consequences that may result from a policy proposal. The analysis serves to highlight trade-offs in a way that sharpens policy debates. Quantifying the likely consequences of policies does not end the need for political debate, but it can make it possible to focus on a manageable set of questions concerning priorities and objectives. Other analysts and institutions can and do provide information to support the policy process, but FAPRI-MU fills a critical niche. First, the breadth of FAPRI-MU?s modeling system allows it to examine a broad range of questions and provide answers that consider how a myriad of factors interact. FAPRI-MU can provide information not just on the likely effects of a proposal on the federal budget or on agricultural markets, but also the effects on consumer food costs, natural resource use, farmland values, and producer income. The institute has been examining farm bill proposals, international trade agreements, and EPA regulations for more than 20 years. This experience working with public decision makers has helped FAPRI-MU analysts understand how the policy process works and how best to provide useful information.
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Goals / Objectives
The Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI-MU) provides objective economic analysis of agricultural policy issues. The project funded by the special grant has two major objectives. 1. Provide information to help public decision makers evaluate farm policy options. a. Assess the implications of retaining current policies for agricultural markets and for food producers, consumers, and taxpayers. b. Analyze the consequences of alternative policies in response to requests from Congress and other decision makers. c. Report results in an understandable manner and a timely fashion. 2. Develop capacity to conduct quantitative analysis of agricultural policy issues. a. Maintain and expand domestic and international data banks. b. Develop and improve models that can be used to project agricultural market outcomes and food sector indicators under a variety of policy scenarios. c. Use formal and informal networks of experts to aid in design and implementation of analysis and review preliminary results.
Project Methods
FAPRI-MU's policy analysis system relies on large-scale quantitative models of agricultural markets, the expertise of FAPRI-MU analysts to develop modeling systems, and outside reviewers. FAPRI-MU's models include thousands of equations intended to represent the behavior of food producers, consumers, and traders around the world. Many of these equations are estimated econometrically using time series data. Others are generated using the principals of economic theory and physical relations known to exist, such as the relationship between animal numbers and feed utilization or the length of time needed for animal herds to change size. FAPRI-MU models are dynamic in that they attempt to reflect how variables move over time in response to adjustment processes that may result from biological constraints, investment behavior, etc. The models are multiple-market, partial equilibrium models. They do not attempt to model the entire economy, but do try to capture key relationships among closely related markets, for example the interrelationships between feed and livestock markets. The models are simultaneous, tying anything that happens in one market to all endogenous variables in the system. A stochastic version of the model allows estimates of the distributions of endogenous variables obtained by solving the models multiple times using random draws of exogenous variables. As comprehensive and complex as FAPRI-MU's modeling system is, it does not and cannot capture all the factors that influence agricultural markets and determine the consequences of agricultural policies. In essence, the quantitative modeling system is a tool used by analysts who also possess a great deal of non-model information. As a further check on FAPRI-MU's models and analysts, the analysis is regularly subjected to extensive outside review. Each year, FAPRI develops a preliminary set of baseline projections in November that are then reviewed at a December conference. Participants in the workshop include analysts from USDA, foreign agencies, multilateral organizations, the private sector, and academia. Following presentations on each commodity by FAPRI-MU staff, attendees comment on both the shortcomings and strengths of the preliminary projections. Reviewers provide extensive comments on the preliminary estimates, and these are incorporated into a revised set of baseline projections prepared in January. The revised baseline is released to Congress and the public, and serves as the starting point for the analysis of policy alternatives.