Key Accomplishments, FY 2010
USDA Priority Goal 1: Assist
rural communities to create prosperity so they are self-sustaining,
repopulating, and economically thriving
Key outcome:
Enhanced understanding by policymakers, regulators, program
managers, and those shaping public debate of economic issues
affecting rural development, rural well-being, farm and household
income, and rural communities.
Key Accomplishments:
Market Performance and Futures Markets. The
past 5 years have seen large increases in the trading of corn,
soybean, and wheat futures contracts by nontraditional traders, a
trend that coincided with historic price increases for these
commodities. ERS analysis investigates whether changes in the
composition of traders participating in the market have contributed
to movements in commodity prices beyond the effects of market
fundamentals.
Market
Analysis and Outlook. ERS-working closely with the World
Agricultural Outlook Board, the Foreign Agricultural Service, and
other USDA agencies-conducts market analysis and provides short-
and long-term projections of U.S. and world agricultural
production, consumption, and trade. The market and outlook
program has enhanced the quality, transparency, and accessibility
of data and analytical information.
New Commodity Programs Affect Farmers. The
recent Farm Bill introduces a new commodity program called the Average Crop Revenue Election (ACRE) program,
which is based on revenue variability at the farm and State levels
rather than variability of prices. Revenue variability
differs across crops and geographical regions. ERS analysis
has analyzed the relationship between historic and expected market
prices and differences in yield levels and variability across crops
and regions, and how these lead to differences in potential ACRE
payments.
Next-Generation Biofuels: Near-Term
Challenges and Implications for Agriculture.
Next-generation U.S. biofuel capacity should reach about 88 million
gallons in 2010, thanks in large measure to one plant becoming
commercially operational in 2010, using noncellulosic animal fat to
produce green diesel. Near-term sector challenges include
reducing high capital and production costs, acquiring financial
resources for precommercial development, developing new biomass
supply arrangements (many of which will be with U.S. farmers), and
overcoming the constraints of ethanol's current 10-percent blending
limit with gasoline.
Geographic
Targeting Issues in the Delivery of Rural Development
Assistance. A 2010 ERS report discusses potential
tradeoffs for distressed rural areas when shifting from one form of
rural development assistance to another, particularly when shifting
to greater use of Government-guaranteed loans. The study
documents the extent of targeting rural development programs to
highly rural areas and to rural areas experiencing distress in the
form of poverty, low employment, and population decline.
Findings indicate that distressed rural areas might fare worse than
other nonmetro areas with some kinds of shifts, such as reducing
grants and direct Government loans to fund increases in guaranteed
loans. The effects on distressed areas would depend on the
form of distress, the programs involved, and how they are targeted
geographically.
Farm Household
Well-Being: Comparing Consumption- and Income-Based
Measures. Household economic well-being can be
gauged by the financial resources (income/wealth) available to the
household or by the standard of living enjoyed by household members
(consumption). ERS has long published estimates of farm
household income and wealth. A 2010 ERS report presents, for
the first time, estimates of consumption-based measures of
well-being for farm households based on new questions in USDA's
annual Agricultural Resource Management Survey (ARMS). The
consumption measure provides a different perspective than income or
wealth on farm households' well-being relative to that of all U.S.
households.
America's Family Farms. Most U.S. farms-98
percent in 2007-are family operations, and even the largest farms
are predominantly family run. Large-scale family farms and
nonfamily farms account for 12 percent of U.S farms but 84 percent
of the value of production. In contrast, small family farms
make up most of the U.S. farm count but produce a modest share of
farm output. Small farms are less profitable than large-scale
farms, on average, and tend to rely on off-farm income for their
livelihood. Generally speaking, farm operator households
cannot be characterized as low-income when both farm and off-farm
income are considered. Nevertheless, limited-resource farms still
exist and account for 3 to 12 percent of family farms, depending on
how "limited-resource" is defined.
Small Farms in
the United States: Persistence Under Pressure.
Ninety-one percent of U.S. farms are classified as small, with
gross cash farm income (GCFI) of less than $250,000. About 60
percent of these small farms are very small, generating GCFI of
less than $10,000. These very small noncommercial farms, in
some respects, exist independently of the farm economy because
their operators rely heavily on off-farm income. The
remaining small farms-small commercial farms-account for most
small-farm production. Overall farm production, however, continues
to shift to larger operations, while the number of small commercial
farms and their share of sales maintain a long-term decline.
Energy Use in
the U.S. Food System. Energy is an important input
in growing, processing, packaging, distributing, storing,
preparing, serving, and disposing of food. Analysis using the
two most recent U.S. benchmark input-output accounts and a national
energy data system shows that in the United States, use of energy
along the food chain for food purchases by or for U.S. households
increased between 1997 and 2002 at more than six times the rate of
increase in total domestic energy use. This increase in
food-related energy flows represents over 80 percent of energy flow
increases nationwide over the period. The use of more
energy-intensive technologies throughout the U.S. food system
accounted for half of this increase, with the remainder attributed
to population growth and higher real (inflation-adjusted) per
capita food expenditures.
USDA Priority Goal 2: Ensure our
national forests and private working lands are conserved, restored,
and made more resilient to climate change, while enhancing our
water resources
Key Outcome:
Enhanced understanding by policymakers, regulators, program
managers, and those shaping public debate of economic issues
related to developing Federal farm, natural resource, and rural
policies and programs that respond to the challenges of climate
change and the need to protect and maintain the environment while
improving agricultural competitiveness and economic
growth.
Key Accomplishments:
Participation in
Conservation Programs by Targeted Farmers: Beginning,
Limited-Resource, and Socially Disadvantaged Operators' Enrollment
Trends. Beginning, limited-resource, and socially
disadvantaged farmers make up as much as 40 percent of all U.S.
farms. Some Federal conservation programs contain provisions
that encourage participation by such "targeted"
farmers. This report compares the natural resource
characteristics, resource issues, and conservation treatment costs
on farms operated by targeted farmers with those of other
participants in the largest U.S. conservation programs. Some
evidence shows that targeted farmers tend to operate more
environmentally sensitive land than other farmers, have different
conservation priorities, and receive different levels of
payments. The different conservation priorities among types
of farmers suggest that if a significantly larger proportion of
targeted farmers participate in these programs, the programs'
economic and environmental outcomes could change.
Markets for Conservation. Farmers produce a
variety of goods and services for which markets generally do not
exist, including improved water quality, carbon sequestration,
wildlife habitat, open space, and water supplies. An ongoing
program of research focuses on the economic and environmental
implications of alternative approaches to the design of markets for
ecosystem services. Accomplishments in 2010 include two short
reports on agriculture's potential role in greenhouse gas
mitigation. One provides a broad overview while the other
examines the potential role that land ownership might play in
determining the agricultural sector's involvement in carbon
sequestration programs. By estimating the carbon
sequestration potential of agricultural producers who own most of
the land they operate, this report finds that land ownership should
not be a constraining factor in agriculture's ability to provide
carbon offsets.
The Farm Act's
Regional Equity Provision: Impacts on Conservation Program
Outcomes. The 2002 and 2008 Farm Acts set a
minimum threshold for conservation funding for each State-one that
exceeds historical funding for some States-for enrolling
agricultural producers in specified conservation programs.
This study examines the impacts of the Regional Equity provision of
the 2002 Farm Act, and explores tradeoffs that occur among
conservation program goals when legislation gives primacy to fund
allocation. The study found that cross-state shifts in
funding reduced the acres receiving conservation treatment for many
resource problems, but increased the net economic benefits from
treatments on some of them. Overall impacts on the types of
producers enrolled were small.
USDA Priority Goal 3: Help
America promote agricultural production and biotechnology exports
as America works to increase food security
Key Outcome:
Enhanced understanding by policymakers, regulators, program
managers, and organizations shaping public debate of economic
issues related to adoption of economically and environmentally
sustainable technologies, factors affecting imports of U.S.
agricultural products (including biotech products), and strategies
to increase markets for U.S. products, including biotech crop
exports.
Key Accomplishments
Ethanol and a
Changing Agricultural Landscape. The Energy
Independence and Security Act (EISA) of 2007 established specific
targets for the production of biofuel in the United States.
This ERS report summarizes the estimated effects of meeting the
EISA targets for 2015 on regional agricultural production and the
environment. Meeting EISA targets for ethanol production is
estimated to expand U.S. cropped acreage by nearly 5 million acres
by 2015, an increase of 1.6 percent over what would otherwise be
expected. Much of the growth comes from corn acreage, which
increases by 3.5 percent over baseline projections. Water
quality and soil carbon will also be affected by changes in the
amount of cropped land. The economic and environmental implications
of displacing a portion of corn ethanol production with ethanol
produced from crop residues are also estimated.
Food Security Assessment, 2009-2010. Despite
ongoing concern about the potential for serious food security
challenges in traditionally food insecure countries, recent ERS
analysis finds that the global food security situation improved
between 2009 and 2010, as the effects of previous price spikes and
the global downturn moderated. These promising results,
however, do not mask the need for continued vigilance as ERS
analysis warns of a long-term deterioration in food security in
some regions, most notably Sub-Saharan Africa.
Trade
Negotiations and Policy Analysis. ERS research on
trade policy is focused on providing analysis that evaluates the
impacts of changes in U.S. and other countries' agricultural trade
policies. ERS research in support of WTO negotiations has
helped to inform and strengthen U.S. negotiating positions on
agriculture. Despite strong critics of WTO, membership
continues to grow as countries seek the benefits of expanding
trade. In the WTO, member countries trade concessions to gain
access to foreign markets, benefiting foreign producers and
consumers in the aggregate.
Assessing the
Benefits of Public Research Within an Economic Framework: The Case
of USDA's Agricultural Research Service.
Evaluation of publicly funded research can help provide
accountability and prioritize programs. This report finds
that peer review-used primarily for establishing scientific
merit-is the most common method of evaluation. Economic
analysis focuses on quantifying ultimate research outcomes, whether
measured in goods with market prices or in nonmarket goods such as
environmental quality or human health. However, standard
economic techniques may not be amenable for evaluating some
important public research priorities or for institutional
assessments. This report reviews quantitative methods and
applies qualitative economic reasoning and stakeholder interviewing
methods to the evaluation of economic benefits of Federal
intramural research using three case studies of research conducted
by USDA's Agricultural Research Service. Differences among
the case studies highlight the need to select suitable assessment
techniques from available methodologies, the limited scope for
comparing assessment results across programs, and the inherent
difficulty in quantifying benefits in some research areas.
USDA Priority Goal 4 :Ensure that all
of America's children have access to safe, nutritious, and balanced
meals
Key Outcome:
Enhanced understanding by policy makers, regulators, program
managers, and those shaping public debate of economic issues
related to improving the efficiency, efficacy, and equity of public
policies and programs relating to food prices and availability at
home and abroad, consumer food choices, nutrition and health
outcomes, nutrition assistance programs, and the protection
of consumers from unsafe food.
Key Accomplishments
Local Food
Systems. A new report from ERS provides a
comprehensive overview of local food systems, explores alternative
definitions of local food, estimates market size and reach,
describes the characteristics of local consumers and producers, and
examines early indications of the economic and health impacts of
local food systems. There is no consensus on a definition of
"local" or "local food systems" in terms of the geographic distance
between production and consumption. But defining "local"
based on marketing arrangements-such as farmers selling directly to
consumers at regional farmers' markets or to schools, is well
recognized. Statistics suggest that local food markets
account for a small, but growing, share of U.S. agricultural
production. For smaller farms, direct marketing to consumers
accounts for a higher percentage of their sales than for larger
farms. Findings are mixed on the impact of local food systems
on local economic development and better nutrition levels among
consumers, and sparse literature is so far inconclusive about
whether localization reduces energy use or greenhouse gas
emissions.
A second ERS report relies on a series of coordinated case
studies to compare the structure, size, and performance of local
food supply chains with those of mainstream supply chains.
Interviews and site visits with farms and businesses,
supplemented with secondary data, describe how food moves from
farms to consumers in 15 food supply chains. Key comparisons
between supply chains include the degree of product
differentiation, diversification of marketing outlets, and
information conveyed to consumers about product origin. The
cases highlight differences in prices and the distribution of
revenues among supply chain participants, local retention of wages
and proprietor income, transportation fuel use, and social capital
creation.
The U.S. Food Environment
Atlas. The Atlas is a web-based mapping tool
developed by ERS that allows users to compare U.S. counties in
terms of their "food environment"-the set of factors that help
determine and reflect a community's access to affordable, healthy
food. The 90 indicators of the food environment currently
included in the Atlas cover a wide range of demographic, health,
and food access characteristics, most at the county level.
The basis of the U.S. Food Environment Atlas is a recognition
that factors-such as store/restaurant proximity, food prices, food
and nutrition assistance programs, and community
characteristics-interact to influence food choices and diet
quality. The Atlas also allows users to get data on any and
all of the county-level indicators for a particular
county.
Taxing Caloric
Sweetened Beverages. The link between high U.S.
obesity rates and the overconsumption of added sugars, largely from
sodas and fruit drinks, has prompted public calls for a tax on
caloric sweetened beverages. Faced with such a tax, consumers may
reduce consumption of these sweetened beverages and substitute
nontaxed beverages, such as bottled water, juice, and milk.
This study estimated that a tax-induced 20-percent price increase
on caloric sweetened beverages could cause an average reduction of
37 calories per day, or 3.8 pounds of body weight over a year, for
adults and an average of 43 calories per day, or 4.5 pounds over a
year, for children. Given these reductions in calorie
consumption, results show an estimated decline in adult overweight
prevalence (66.9 to 62.4 percent) and obesity prevalence (33.4 to
30.4 percent), as well as the child at-risk-for-overweight
prevalence (32.3 to 27.0 percent) and the overweight prevalence
(16.6 to 13.7 percent). Actual impacts would depend on many
factors, including how the tax is reflected in consumer prices and
the competitive strategies of beverage manufacturers and food
retailers.
Does SNAP Decrease Food Insecurity?
Untangling the Self-Selection Effect.
Self-selection by more food-needy households into the Supplemental
Nutrition Assistance Program (SNAP, formerly called the Food Stamp
Program) makes it difficult to observe positive effects of the
program in survey data. This study investigates
self-selection and ameliorative program effects by examining
households' food security month by month for several months prior
to initial receipt of SNAP benefits and for several months after
joining the program. The results are consistent with a
moderate ameliorative effect of SNAP-reducing the prevalence of
very low food security among recent entrants by about
one-third-although they do not conclusively demonstrate that extent
of amelioration.
Foodborne Illness Cost
Calculator. ERS's estimates of the costs of
illness and premature death for a number of foodborne illnesses
have been used in regulatory cost-benefit and impact
analyses. Like all cost estimates, the ERS estimates include
assumptions about disease incidence, outcome severity, and the
level of medical, productivity, and disutility costs. Changes
to any of these assumptions could change the cost estimates and, as
a result, change the way policy makers rank risks, prioritize
spending, and formulate food safety policies. The Foodborne
Illness Cost Calculator provides information on the assumptions
behind foodborne illness cost estimates-and gives users the
opportunity to make their own assumptions and to calculate their
own cost estimates.
Food Assistance
and Nutrition Research Program, Final Report: Fiscal 2009
Activities. This report summarizes ERS's Food
Assistance and Nutrition Research Program (FANRP) activities and
accomplishments in fiscal 2009, including newly awarded projects
and recent publications. FANRP supports intramural and
extramural research on a wide range of policy-relevant food
assistance and nutrition topics. The three perennial program
themes are (1) Program Outcomes and Economic Well-Being of
Participants, (2) Program Access and Economic Determinants of
Participation, and (3) Program Dynamics and Efficiency. The
core food and nutrition assistance programs include the
Supplemental Nutrition Assistance Program (SNAP)-formerly the Food
Stamp Program-the child nutrition programs, and the Special
Supplemental Nutrition Program for Women, Infants, and Children
(WIC).
Consumer Data
and Information Program (CDIP). ERS continued
development of a consumer and data infrastructure needed for
analyses of food policy issues. Particularly important was the
planning and development of a national survey of food acquisition
focusing on low-income households. Additional CDIP efforts included
improving ERS's Food Availability Data System, obtaining
information on Americans' time use on eating and preparing food
using the Bureau of Labor Statistics American Time Use Survey;
gathering information on consumer knowledge about diets and health,
as well as economic content using the National Health and Nutrition
Examination Survey (NHANES); and understanding the characteristics
of proprietary datasets. ERS initiated an effort to make the
data collected through NHNAES more readily available to
researchers, and launched a new effort to design the content of the
2009-10 module for NHANES. To support price analysis and
consumer food choice behavior, ERS continued the acquisition and
use of Nielsen's Homescan data on packaged and random weight food
purchases.
Food
Availability (Per Capita) Data System. The ERS
food availability (per capita) data system includes three distinct
but related data series on food consumption. The data serve
as popular proxies for actual consumption. Food availability
data are now available through 2007 at the national level.
Also included are data on nutrient availability in the food supply
and data on loss-adjusted food availability. This latter data
series uses dietary recommendations from the 2005 Dietary
Guidelines for Americans and its supporting guidance document
MyPyramid Plan. This data series provides estimates, for
example, of the pounds of beef available for domestic consumption
per capita per year. The data are available on an annual
basis. Most data extend back to 1909.
The Impact of
Food Away From Home on Adult Diet Quality.
Food away from home (FAFH) has been associated with poor diet
quality in many studies. It is difficult, however, to measure
the effect of FAFH on diet quality since many unobserved factors,
such as food preferences and time constraints, influence not just
our choice of where to eat but also the nutritional quality of what
we eat. The effects vary depending on which meals are
consumed away from home. On average, breakfast away from home
decreases the number of servings of whole grains and dairy consumed
per 1,000 calories and increases the percent of calories from
saturated and solid fat, alcohol, and added sugar (SoFAAS) in a
day. Dinner away from home reduces the number of servings of
vegetables consumed per 1,000 calories for the average adult.
Breakfast and lunch away from home increase calories from saturated
fat and SoFAAS, on average, more among dieters than among
non-dieters. Some of the overall negative dietary effects of
FAFH decreased between 1994-96 and 2003-04, including those on
whole grain, sodium, and vegetable consumption.
Changing
Participation in Food Assistance Programs Among Low-Income Children
After Welfare Reform. In 1996, the safety net for
poor households with children fundamentally changed when Federal
legislation replaced Aid to Families with Dependent Children (AFDC)
with Temporary Assistance for Needy Families (TANF). This study
investigates participation in, and benefits received from,
AFDC/TANF and food assistance programs, before and after the
legislation, for children in low-income households (income below
300 percent of the Federal poverty line). The results show
that, between 1990 and 2004, the share of children receiving food
stamp benefits declined, most notably among children in the poorest
households (income below 50 percent of the Federal poverty
line). The share of children receiving benefits from the
school meals programs and the Special Supplemental Nutrition
Program for Women, Infants, and Children (WIC) rose, mainly among
children in low-income households with income above the Federal
poverty line. Overall, the share of children in households
that received benefits from AFDC/TANF or food assistance programs
grew from 35 percent in 1990 to 52 percent in 2004.
However, the net result of these changes is that average total
inflation-adjusted household benefits from all programs examined
declined. The decline was largest among children in the
poorest households.