Perceptions of Agriculture Don't Reflect New Reality

Purdue University News Service 1132 Engineering Administration Building West Lafayette, Indiana 47907-1132 voice (765) 494-2973 fax (765) 494-0401

October 18, 1996

PERCEPTIONS OF AGRICULTURE DON'T REFLECT NEW REALITY, EXPERT SAYS WEST LAFAYETTE, Ind. ã On a long drive to Lexington, Ky., Purdue agricultural economist Michael Boehlje [BOWL-jee] was thinking of how he was constantly having to explain to people how agriculture is changing at the end of the 20th century.

He picked up his tape recorder and began listing the old perceptions of farming and the coming realities of agribusiness. The list has been met with enthusiasm from his academic peers, and it was published in the economics journal Choices.

"Some of these trends reflect what is already happening in the agriculture industry," Boehlje says. "Most of these trends are still on the horizon, although it's a horizon that's not that far away.

"The world of agriculture is moving to an industrialized model of production. Farmers are no longer looking to produce a generic product, such as corn, but are interested in biologically producing unique products with a specific end use in mind, such as white corn for corn chips."

In addition to white corn, other targeted products might soon include high-oil corn, tofu soybeans, soybeans high in certain amino acids for livestock feed, and, in the not-too-distant future, even different varieties of corn and soybeans grown as feed for specific species of livestock.

"Most of these concepts will surface in commercial or farm situations at the beginning of the 21st century," Boehlje says, "but considering that's only four years away, we are on the verge of seeing most of these concepts become reality." Here's his list of the old vs. the new. Agriculture Ä Old: Agriculture is an art form. New: Agriculture is primarily science- or R&D-based. Ä Old: Agriculture is synonymous with farming and the production of commodities. New: Agriculture is responsible for manufacturing food products, and it represents the entire food production and distribution system. Ä Old: Agriculture is made up of family farms and small businesses. New: Agriculture is made up of large-scale or industrialized interests. Ä Old: Operating farmers own most of the farm land. New: Much (41 percent) of the farmland is owned by nonoperators. Ä Old: Farming is a healthy and safe lifestyle. New: Farming is a hazardous occupation. Markets and commodities Ä Old: Impersonal markets are open to all. New: Markets are personal, negotiated, exclusive. Ä Old: Farmers have an adversarial relationship with suppliers and purchasers New: Farmers form partnerships with suppliers and purchasers. Ä Old: Farmers produce their own inputs (insourcing), such as replacing livestock or growing feed. New: Farmers buy inputs from someone else (outsourcing). Ä Old: Market prices bring risk. New: Relationships are risky but offer price security. Ä Old: Farmers are independent. New: Farmers have inter-dependence within systems. Ä Old: New technologies are prized. New: New ways of doing business are prized. Ä Old: Information about research and developments is available from land grant universities and is open to the public. New: Information about research and developments from corporations is private, proprietary and not available to the public. Consumer attitudes toward agriculture Ä Old: Globally, consumers fear high food costs and food shortages. New: Food costs for consumers are relatively decreasing, and worldwide sources reduce the prospects of shortage. Ä Old: Consumers believe their food is safe. New: Consumers question the safety of food. Ä Old: The public trusts and believes in farmers as stewards of resources. New: The public questions farmers as stewards of resources.

Ä Old: United States is the prime world supplier. New: Many suppliers exist worldwide. Ä Old: Domestic markets are a farmer's prime markets. New: Foreign and industrial markets are critical markets for farmers. Government involvement in agriculture Ä Old: The federal budget has adequate funds to support agriculture. New: Federal and state budgets are in deficit, which leaves less funding for agriculture. Ä Old: Farmers have significant political influence. New: Farmers have limited political influence. Ä Old: Farmers are economically disadvantaged. New: Farmers' income is comparable to others. Ä Old: Income from farming measures a farmer's economic well-being. New: Household income measures a farmer's economic well-being. Ä Old: Private property rights are sacred. New: Society is reserving more property rights for the public. Farmers and the environment Ä Old: The USDA is the most important governmental agency for farmers. New: The EPA is the most important governmental agency for farmers. Ä Old: Farmers use and exploit resources to maintain or increase productivity. New: Farmers protect resources and practice environmentally sound use of resources to reduce pollution. Ä Old: Efficiency is paramount . New: Preserving the environment is paramount. Personal and professional skills required of farmers Ä Old: Technical skills and core competencies are critical to success in agriculture. New: Communication, personal skills, and new or unique skills are critical to success in agriculture. Ä Old: Tradition and remembering are important in agriculture. New: New ideas are important in agriculture ã forget how it was done in the past. Ä Old: Farmers have higher moral standards, a strong work ethic and generally higher values than those of the general population. New: Farmers are no different in terms of values, work ethic, or moral standards than the rest of society. Rural life Ä Old: Economic well-being of rural communities depends upon farming. New: Economic well-being of rural communities depends on nonfarm activity. Ä Old: Rural areas have a higher quality of life than urban areas. New: Rural areas have a quality of life that is lower or the same as urban areas. Farm management Ä Old: Farmers produce staples such as corn, soybeans, beef or pork. New: Farmers produce fashion or niche products such as white corn, tofu soybeans, or very lean pork. Ä Old: Assets determine what the farm will produce. New: Customer demands determine what the farm will produce. Ä Old: Hard assets ã land, machinery, buildings ã are an agribusiness's prime source of strategic competitive advantage. New: Soft assets ã people, organization, plans ã are an agribusiness's prime source of strategic advantage. Ä Old: Livestock production sites are concentrated in a geographical area. New: Production sites are geographically dispersed or separated to prevent disease, to reduce the environmental impact in one area, and because of improved transportation technologies. Ä Old: Agribusinesses strive to own assets. New: Agribusinesses strive to control assets. Ä Old: Money, finances, and assets are the sources of an agribusiness's power and control. New: Information is the prime source of an agribusiness's power and control. Ä Old: Labor is an expense, and equipment is an investment. New: Labor is an investment, and equipment is an expense.

Source: Michael Boehlje, (317) 494-4222; home, (317) 497-2472; e- mail, [email protected] Writer: Steve Tally, (317) 494-9809; e-mail, [email protected]