Farmers as Environmentalists

by Levi Russell

This morning in my daily ag reading I came across an article entitled "Greens Make Green." The author lays out the case for the farmer-as-environmentalist better than I've ever seen, so I thought I'd share it here. The underlying economic argument here is that there is great incentive compatibility between farmers (who are interested in long-term profits) and environmental sustainability. Do you find it compelling? Let me know in the comments.

In truth, farmers and environmentalists should be allies. The environmental and agricultural communities have more in common than conventional wisdom might suggest. Both desire to preserve our planet and its resources for future generations. I am not shy about saying farmers are the original environmentalists.

To a person, every farmer I have ever met is driven by an ethical obligation to protect the environment. They view themselves as stewards of the land. And for good reason: Nearly all want their children and grandchildren to carry on the tradition. Cousins Scott and Tom Deardorff II reflect the common theme of sustainability that connects the past to the present and future. Founded in 1937 by patriarch and great-grandfather W. H. Deardorff, Southern California-based Deardorff Family Farms has dedicated four generations to refining its environmental craft. For nearly eight decades, the Deardorff family has been driven by the relentless pursuit of improvement, pioneering many farming practices aimed at increasing productivity while reducing their reliance on natural resources.

Today, Scott and Tom have not only embraced but expanded the family legacy of stewardship. For example, they have invested heavily in the latest water-saving technologies, including drip irrigation and state-of-the-art weather stations and soil moisture monitors. The cousins have also curtailed the use of fertilizer and pesticides on their organic vegetable farms through innovative soil fertility programs and integrated pest management systems. And they recently completed construction on a cooling and packing facility that meets the highest green building standards in the country.

Multigenerational farms like theirs are the heart and soul of agriculture in the West and across the country. They are the very embodiment of sustainability. We should be so lucky as to entrust all our natural resources to the collective care of such thoughtful stewards.

If you can't bring yourself to buy the moral argument, at least consider renting the financial one. Farmers are business owners. They are motivated by sustainable profit. Their businesses are dependent on healthy soil and clean water, both of which lead to stronger yields and higher quality products. The math is quite simple: An environmentally healthy farm can deliver sustainable profits, while land that has been abused will one day cease to produce anything. Furthermore, inputs like fertilizer and pesticides are expensive; a business that doesn't minimize operating costs won't stay in business very long. Clean air, soil, and water are all outcomes supported by environmentalists. So why do so many continue to paint farmers as the enemy?

In his farewell address, President Eisenhower famously warned the nation against "unwarranted influence .  .  . by the military-industrial complex." Today we see the maturation of an environmental-industrial complex, defined by multimillion-dollar global enterprises closely integrated with academia and government regulators implementing environmental programs.

Like a storyline out of Mad Men, environmental activists have channeled their inner Don Drapers, fomenting fear of business and industry, and of human activity generally, in order to build a database of committed donors. It is an ingenious business model, used by corporate America since the early 1920s, when Gerard Lambert stigmatized halitosis to sell Listerine. Marketers have long understood that fear is a powerful motivating tool.

Every cause needs a bad guy, a threat that must be put down. For Listerine, it was bad breath. For too many environmental organizations, farmers—cast as the pillagers of Mother Earth—have served as compelling bogeymen (typically referred to as "corporate agriculture," "industrial agriculture," or the like) to alarm the 98 percent of Americans who aren't farmers.

We are all motivated to some degree by self-interest. Farmers are motivated by the love of farming and social good that comes from providing healthy food, and they are also motivated by the desire to succeed financially. Environmental activists working in big organizations aren't all that different. There is no doubt that most choose a career based on a commitment to environmental values and a desire to do good. And there is also no doubt that another motivation, and one that is entirely defensible, is the financial reward and career security that these organizations can provide.

Unfortunately, in the public debate, it is perfectly acceptable to point to farmers' financial motivations and equally unacceptable to acknowledge the financial motivations of environmental advocates. Those in private enterprise who are targeted by the policy and political initiatives of the environmental lobby ought to be more vocal about that.

If one can acknowledge the reality that the environmental lobby is motivated not only by the values of environmentalism, but also by the financial rewards of growing a motivated donor base, one might ask whether it would benefit these organizations to ever declare a problem solved. After all, while committed donors might feel good upon hearing such an announcement, they would also have one less reason to contribute.

Nowhere was this more in evidence than during the opposition waged against Senator Dianne Feinstein's compromise California drought legislation in 2014, which culminated in a joint-letter from multiple organizations slamming her bill.

Not one to seek the ire of environmentalists, the senator candidly responded—as quoted in the San Francisco Chronicle—that they "have never been helpful to me in producing good water policy." She went on to lament, "I have not had a single constructive view from environmentalists of how to provide water when there is no snowpack."

The practice of environmental protection and the business of environmentalism are two sides of a scale. Our nation's natural resources have benefited from much that has come from the former, but today the scale is weighted too much to the latter. It is the business side of environmentalism that produces the political targeting of agriculture.

It should stop. We share a common aim: to safeguard the planet for its people, animals, and plants. Imagine how much good could be accomplished if all farmers, regardless of size, whether conventional or organic, were accepted and embraced as partners for environmental protection. Now that is a narrative I know Don Draper could sell.

Tom Nassif is president and CEO of the Western Growers Association.

The Academic Literature on State Tax Cuts

by Levi Russell

State fiscal policy continues to be a popular issue. Some are criticizing right-leaning state governments for lowering taxes with the intention of boosting growth. These commentators point out that growth in these states has not skyrocketed. Others are criticizing left-leaning states for funding issues with their public pensions and financial problems associated with Affordable Care Act co-ops. These other commentators point out that these financial issues are not easy to solve and that a more conservative spending approach is probably warranted.

So, being an economist, I thought I'd look at the academic literature on the effects of state-level taxation on economic growth. I pulled the 5 most recent articles I could find on the subject from Google Scholar and looked at the results. Of the 5 articles (of which one examined Canadian provinces) I read, 4 showed a negative effect of state taxation on growth. One showed no effect on own-state growth, and a positive effect from other states' tax increases. I may have missed some other important analysis on this subject, but it seems to me that we can (at least provisionally) conclude that 1) it's not likely that lower taxes are harming growth at the state level and that 2) it's probably a good idea to find ways to fix over-spending rather than increase taxes.

Here are the articles I read. If I missed an important, recent paper, please link to it in the comments below!

Another look at tax policy and state economic growth: The long-run and short-run of it, Economics Letters, 2015, Bebonchu Atems (one of my former graduate school colleagues)

The Determinants of U.S. State Economic Growth: A Less Extreme Bounds Analysis, Economic Inquiry, 2008, W. Robert Reed

The Impact of Tax Cuts on Economic Growth: Evidence from the Canadian Provinces, National Tax Journal, 2012, Ergete Ferede and Bev Dahlby

Redistribution at the State and Local Level: Consequences for Economic Growth, Public Finance Review, 2010, Howard Chernick

The Robust Relationship between Taxes and U.S. State Income Growth, National Tax Journal, 2008, W. Robert Reed

Some Nuance on the $15 Minimum Wage

by Levi Russell

Adam Millsap at the Mercatus Center has a great short piece on the effect the $15 minimum wage would have on labor markets. Though Millsap criticizes the $15 minimum wage, he does it in a very different way than any I've seen.

He takes as a starting point Arindrajit Dube's conjecture that the minimum wage should be set at 50% of the median wage. It's important to note that Dube is actually a proponent of the $15 minimum wage but believes that it could create problems, especially if the ratio is above 80%.

Millsap uses data from Washington D.C. and Minneapolis, MN to calculate the (projected) ratio of the $15 minimum wage to half the median wage in each of these cities. Millsap shows that in Minneapolis, the $15 minimum wage is projected to be 86% of the median wage for people 16 years of age and older. In D.C., the ratio is only 53%.

So, given Dube's preference for a minimum wage set at 50% of the median wage and warning about a minimum wage over 80% of the median, the $15 minimum is potentially very problematic for cities like Minneapolis. I imagine that it would be far worse for smaller rural communities.

Yes, Virginia, Plowing is Pollution

by Levi Russell

Obviously the title is meant to be facetious. I'm just in shock about this ruling and am concerned about the ramifications it will have for producers in the future.

Below I reproduce a short Farm Futures article that summarizes a recent court decision in California regarding the Clean Water Act. As cynical as I am, this decision did surprise me.

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Judge Kimberly Mueller on June 10, 2016 in the U.S. Eastern District Court of California found that John Duarte, a nursery operator and wheat farmer, plowed wetlands, four to six inches deep, and therefore violated the Clean Water Act (CWA).

The Judge found Mr. Duarte, by chiseling a pasture, discharged fill material into a water (vernal pool) of the United States. Get this! The Court wrote “In sum, soil is a pollutant. And here, plaintiffs instructed [a contractor] to till and loosen soil on the property.”

This plowing, according to the Court, caused “…the material in this case soil, to move horizontally, creating furrows and ridges.” You will not believe this. 

The Court wrote, “This movement of the soil resulted in its being redeposited into waters of the United States at least in areas of the wetlands as delineated...” In sum, the Judge found that chiseling no more than a few inches of soil constituted an addition of a pollutant to a wetland.

Stunning!

The Court also evaluated whether the tractor and soil chisel plow were point sources under the CWA. The Court cited cases which found that bulldozers, backhoes, graders, tractors pulling discs and rippers can be point sources under the CWA.

The Court describes Mr. Duarte’s equipment as having 7 shanks with 24-inch spacing and each shank was 36 inches long. The Court wrote, “The equipment loosened and moved the soil horizontally, pulling the dirt out of the wetlands [vernal pools] and redepositing it there as well.” 

Vernal pools are described as meeting all three wetland parameters. They are dry the majority of time. As a result, the Court found that the equipment used to aerate the soil was a point source under the CWA.

Under the CWA there must be a discharge of a pollutant to navigable waters from a point source. Again, it is believed that to have a discharge of a pollutant, there must be an addition of the pollutant to the navigable waters. It is also believed that farming operations allegedly have an exemption under the CWA which exempts certain activities of farming and ranching from CWA permitting requirements. (The Court seems unaware that farming is considered a nonpoint source covered by section 319 of the CWA)

The CWA regulations defines farming and declares “Normal farming…activities such as plowing, seeding, cultivating, minor drainage and harvesting for the production of food, fiber and forest products,…” are not activities which are prohibited or regulated under the CWA. Plowing is also defined by EPA as meaning “…all forms of primary tillage, including moldboard, chisel or wide-blade plowing, discing, harrowing and similar physical means utilized on farm, forest or ranchland for the breaking up, cutting, turning over, or stirring of soil to prepare it for the planting of crops.”

The Court found that Mr. Duarte’s activities did not meet the exemption EPA has provided for farming. The Court believed that the land being aerated by Mr. Duarte had not been land used for farming activities but for the grazing of animals. (Grazing or pasturing of animals apparently is not an agricultural activity!) The Court believed the farming operation which could be exempted had ceased to operate as a farm, and that Mr. Duarte was engaging in new agricultural activities. 

Legal complications

The case is extremely complicated from a legal standpoint where Mr. Duarte sued the Army Corps of Engineers (Corps) claiming the Corps had violated his 5th Amendment right to due process and his 1st Amendment right against retaliatory prosecution. According to the opinion, there were two rounds of motions to dismiss significant evidentiary objections and objections over what constituted hearsay. The U.S. Department of Justice filed a counterclaim against Mr. Duarte using the CWA and won.

Basically the case says plowing can be a polluting activity particularly in areas that can be identified as vernal pools, vernal swales, seasonal wetlands, seasonal swales and areas where there may be intermittent and ephemeral drainages.

Mr. Duarte had purchased the land in order to plant winter wheat. He had been very careful in hiring consultants to identify any wetlands. Apparently what he did was insufficient according to Judge Mueller, an Obama appointee, who served as a City Councilwoman in Sacramento. In addition she has worked as a U.S. Magistrate Judge but appears to have no experience in agriculture. It shows!  It is indeed surprising that an attempt to grow wheat on approximately 450 acres results in the violation of the CWA.

More Mercatus Center Research on State Tax Reform

by Levi Russell

In a previous post I shared a comparison of the results of tax reform in Utah and Kansas. That comparison was part of a broader analysis of reform efforts in 5 states: Kansas, Michigan, North Carolina, Rhode Island, and Utah. The report provides a detailed analysis of reform efforts and draws some general conclusions about how reform should be implemented.

The  authors generally report good news for the states in terms of government fiscal health. Kansas is an exception. Here's one of the "common trends" identified in the report:

The most effective tax reforms seem to be those that both lower the rates of taxation and simultaneously broaden the scope of activities that are taxed. Such reforms improve the efficiency, convenience, and transparency of a tax system.

 This is the opposite of what Kansas has done. Unlike North Carolina, Kansas politicians failed to couple the tax reform effort with orderly spending cuts. Further, as the report notes, Kansas narrowed its tax base in a distortionary way:

Kansas also made the decision to exempt “pass-through” profits from corporate taxation; that is, business income that is taxed on individual business owners’ tax returns. While this lowers the tax burden on businesses, it creates distortions in the way business owners choose to classify their operations. Moreover, it is inequitable because it disproportionately benefits high earners and creates an unfair playing field among businesses.

There has certainly been a lot of media coverage of Kansas' state government budget information. Another Mercatus paper compares state government fiscal situation data from all 50 states and Puerto Rico in 2014. Kansas is 27th of the 51 states/territories examined. This doesn't sound consistent with the dominant narrative in the media.

How has the reform effort affected the private economies in these states? Below is a graph of private GDP indices for the five states listed above, the US as a whole, and two other states that are, to put it mildly, in big trouble fiscally: California and Illinois. It's tough to draw any general conclusions. Michigan, Utah and California are all doing quite well relative to the US as a whole. Michigan and Utah have had significant tax and spending reductions; California hasn't. Illinois, Kansas, North Carolina, and Rhode Island are all lagging relative to the US as a whole. Kansas and Illinois had pretty flat growth from 2012 to early 2014, but have picked up recently. Kansas in particular seems to be catching up to the US as a whole. North Carolina has been catching up at a feverish pace.


Quantity Index for Real Private State GDP - BEA

click image to enlarge

Yet another Mercatus paper provides a short review of the literature on the relationship between state tax policy and the economic health of the state. Here's the relevant paragraph:

Research finds that higher state taxes are generally associated with lower economic performance. There is somewhat weaker evidence that state and local taxes can significantly reduce income growth within a state, particularly when the revenues raised are devoted to transfer payments. More recent research corroborates this finding in relation to net investment and employment. However, when additional tax revenue is used to improve the quality of public goods and services, economic growth may increase. When looking at business activity more broadly, more comprehensive reviews of the literature find higher taxes to be associated with less economic growth. They also find this relationship to be stronger within metropolitan areas than across metropolitan areas, which means that local taxes have a larger effect on economic growth when it is less costly for firms and taxpayers to relocate to avoid the tax.

Legal and Economic Implications of Farm Data

by Ashley Ellixson

Discussions of farm data are a hot topic not only in today’s agricultural industry but also across the legal field.  I recently authored an article that describes the legal and economic concerns surrounding data ownership, privacy rights, and possible recourse in event of intentional data breach.  The publication aims to answer the questions around “who owns farm data?”, “what happens when farm data is misappropriated?” and “what can I do to protect my farm’s data?”  These questions and many more are swirling around industry, legislatures, and farm organizations.  

Until the law defines farm data or a court speaks to the protections of such data, experts in the field can only suggest best management practices (both at the farm-level and the legal liability level). From the farm perspective, not only the law but the relative value of farm data will direct the optimal choice for damages, if any. Damages may be realized as loss of local bargaining power or a direct cost to the farmer; however, only time will tell. This collaborative effort between Kansas State University and University of Maryland can be found on the AgManager.info website.  

Ashley Ellixson, J.D., LL.M. 

Guest Contributor

@Legally_Ashley

E-mail

Do cities make us more productive?

by Levi Russell

I came across this blog post late last week and thought I'd share it. In the post, the author (a geographer) presents the typical case that city density is positively correlated with productivity. This is thought to be due to "agglomeration externalities" which are "the benefits that firms obtain by locating near each other."

The author presents some statistics showing a positive correlation between productivity and city size or density. Part of the problem of establishing a causal link between density and productivity is that once you dig into the data to figure out exactly who gets more productive in denser places, it tends to be only people who are highly skilled with "nonroutineized work." His second critique is that we don't know how density drives productivity. He gives this task to economists.

He then mentions some policy problems and alludes to an issue I've often thought about when taking courses on urban and regional economics. Do we need to reign in urban sprawl? If density doesn't actually drive productivity, is sprawl really that bad? What about technology that allows a lot of people to telecommute effectively?

I found the post thought-provoking and it has some interesting data. Let me know what you think!

Precision Agriculture Implications for Farm Management: Farmland Leasing Example

By Terry Griffin

In the US, most farmland is owned by the farmer. However, substantial percentages are owned by someone other than the farmer. In the most recent USDA Census of Agriculture, 62% of farmland was owned by the farmer-operator. The percentage of rented farmland has ranged from 35% in the 1960’s to nearly 43% in 1992. Rented farmland proportions are higher in the Delta, Corn Belt, and Plains states than the rest of the country (USDA Census of Agriculture 2012). Therefore, a primary focus of farm management has been on acquiring and maintaining control of farmland; and an important topic that precision agricultural technologies can be a useful tool.

During my precision agriculture presentations I have been discussing the value of data. In particular, the prevalence of farmers and service providers creating printed maps from yield, soil, and other data as the ultimate use of data was discussed. The value of these printed maps was debated. Upon stating that unused data has no value, I mentioned that printed yield maps usually end up with similarly very low values, but with a notable exception for farm management. One exception is that some landowners appreciate printed yield maps, especially when presented in a format such as framed like a picture suitable for hanging or as kitchen table place mats. Several participants at the meeting paused to make written notes, and several hallway conversations followed. Given the interest, it seemed worthy of a short write-up to share this idea.

Even though not all landowners would find value in receiving printed yield maps at the end of the year, many would cherish this and it ultimately could make the difference for a farmer to continue farming that tract. The overall farm management principle here is that farmers who get to know what makes their landowners happy can position themselves better to maintain and enhance that relationship (assuming some level of utility maximizing behavior). Some landowners view their investment just as that, an investment, and value the revenue stream only (i.e. profit maximizing). Others would enjoy telling their friends about their asset, the history, and current events expressed through a printed yield map, either framed or imprinted on a coffee mug or perhaps some other creative expression of it.

At a time when cutting-edge agricultural discussions include ‘big data’, telematics, and autonomous decision-making processes, there are still many opportunities to use precision agricultural technologies to improve basic farm management. In particular with the current economic farm environment of potentially increased financial stress, existing technology on the farm may aid in ways not previously considered. Other examples of using precision agriculture technology for farm management exist that will be discussed at a later time.

Potpourri

House Ag Committee chair Conaway comments on the state of the ag economy.

Don Boudreaux corrects Paul Krugman on the definition of a public good.

Bryan Caplan blogs about an interesting article by Niclas Berggen on the pro-govt bias of behavioral economists. Berggen's results:

Our main findings are that 20.7% of all articles in behavioral economics in the ten journals contain a policy recommendation and that 95.5% of these do not contain any analysis at all of the rationality or cognitive ability of policymakers. In fact, only two of the 67 articles in behavioral economics with a policy recommendation contain an assumption or analysis of policymakers of the same kind as that applied to economic decision-makers. In the remaining 65 articles, policy recommendations are proffered anyway.

Potpourri

David Widmar at Agricultural Economic Insights has some interesting maps showing the run-up in ag land values from 2004-2014. Check it out!

The folks at the Pro Market Blog (a new blog associated with the Stigler Center at U Chicago) use survey data to show Americans' concerns about the influence campaign donors have on candidates. Trump and Sanders are seen as the most removed from these concerns.

Here's a short podcast interview with Bill Easterly (NYU) who works in international development. Easterly is famous for his skepticism of the benefits of foreign aid.

Don Boudreaux, in his characteristic style, criticizes Krugman for his support of trade protectionism. (here and here)

James Pethokoukis blogs about Deirdre McCloskey's work on economic history and what made the west prosperous.

More on Rural Health Care and Certificate of Need Laws

After my last post on certificate of need laws (CON laws) went up earlier this week a colleague rightly noted that the paper only addressed the quantity of facilities available in the rural areas of a state, not the quality of the care provided.

I think this recent post is at least a step in that direction. The authors examine the availability of imaging services in states with and without CON laws and find that:

These CON requirements effectively protect established hospitals from nonhospital competitors that provide medical imaging services, such as independently practicing physicians, group practices, and other ambulatory settings. In the process of protecting hospitals from these nonhospital providers, CON laws limit the imaging services available to patients.

The existence of a CON law decreases MRI scans by 34 percent, CT scans by 44 percent, and PET scans by 65 percent, all relative to states without CON laws.

As Hayek argued in the conclusion to his Nobel speech:

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.

CON laws have nothing to do with licensing of practicing physicians but with planning by state committees exactly how and in what manner new health care services will be established. The problem is that centrally planning (at the state level) this type of activity presumes that regulators possess knowledge they very well may not. It may very well be that hospital administrators and investors have a better grasp of the needs of their communities than state planning boards.

While CON laws may have important benefits, Stratmann and Baker find equally important drawbacks.

Regulation and Rural Hospitals

A new working paper at the Mercatus Center looks at the effect of Certificate of Need (CON) laws on rural health care provision. CON laws require providers to get permission from state governments. This permission is ostensibly determined by the need for new facilities in an area. Currently, CON laws are on the books in 26 states primarily in the southeast, northeast, and northwest.
According to the authors, the primary concern that CON laws address in rural areas is that ambulatory surgical centers (ASCs) will engage in "cream skimming" which is the practice of refusing to treat poorer, more risky, or less well insured clients and only treating the easy cases. This would result in closures of rural hospitals reducing the quantity and quality of care in rural areas.

However, CON laws are literally a barrier to entry in the health care market, so it remains an open question whether this barrier to entry reduces the quantity of hospitals or, through some unintended consequence, increases the quantity of hospitals by preventing "cream skimming."

Cooperation Between Environmentalists, Oil, and Agriculture

A recent Twitter conversation with the folks at the Property and Environment Research Center (PERC) pointed me to some interesting examples of cooperation between environmentalists and oil interests, farmers, and ranchers. Some of them involve artificial markets for conservation credits while others are simply payments to land owners to help preserve environmental amenities. I don't specialize in environmental economics but I think it's important to bring up theses issues from time to time on the Farmer Hayek blog. On a related note, I want to be clear that I don't take a position on these issues personally since I haven't studied them carefully.

One example concerns the decline of monarch butterfly habitat. A blog post last week at the Environmental Defense Fund gives the details:

The Hockey Stick of Banking Regulation

Since the early days of the financial crisis, we've heard from many sources that it was caused by deregulation in the financial sector. Some economists and commentators blamed the crisis on general deregulation, while others pointed to the repeal of specific regulations over the last couple of decades as potential causes.

Recently, the Mercatus Center published RegData, which is a comprehensive measurement of regulatory restrictions by industry and by regulator. This index gives us a better picture of the regulatory environment at the industry level. I've referred to RegData in previous posts about EPA and USDA regulation of agriculture (here, here, here, here, and here).

In this post I provide some graphs and a brief discussion of banking regulation since 1970. This is an especially important issue in agriculture since ag lenders are likely to face liquidity issues due to low farm profits in coming years. 

Major Environmental Legislation and EPA Regulations

In my last post on EPA regulation of agriculture, I looked at the majority party in the House, Senate, and the party of the President from 1974 to 2014. Some of it lined up with what I think most people, including me, would assume (i.e. Democrat control means more regulation), but much of it didn't. I suspect part of this is a function of our short memories but a good portion of it could be the relative independence with which regulators operate. They don't necessarily need legislative mandates to change the regulatory environment. One other thing to keep in mind: the regulations in this index can apply to any aspect of agriculture. Regulatory restrictions on forestry, crop farming, ranching, concentrated animal feeding operations, and aquaculture are all included in this index.

In this post I want to show some major legislation and regulatory actions laid over the same 1974-2014 regulatory restrictions data. I don't know if the events I identify on the chart are the causes of subsequent increases in regulation. I picked most of these events off the EPA History website, so the agency itself believes they're significant. If and when I dig into the RegData data for a research project, I'll be able to tell a more interesting story.

The graph shows EPA regulatory restrictions on agriculture. Data were taken from the RegData Database at the Mercatus Center at George Mason University. The data are counts of restrictive words in the Code of Federal Regulations such as "cannot," "must," "shall," etc weighted by the probability that the particular Title and Part apply to agriculture. This time I converted the restrictions count into an index (something the Center recommends) in part to make it easier to see just how much regulatory growth the ag industry has experienced. In 2014, there was 492% more regulation on agriculture than there was in 1974.

The Foreign Subsidies Database

If you've ever wanted information about agricultural subsidies in other countries, the Foreign Subsidies Database at Texas Tech is a great resource.

The page has several interactive features. One feature is the Subsidy Tables which are laid out in table form and includes information from Argentina, Australia, Brazil, Canada, China, Egypt, the 27 countries of the EU, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, Russia, South Africa, South Korea, Thailand, Turkey, Uzbekistan, Vietnam, and the West African countries.

The tables include information on direct support (price supports, direct payments, import quotas and tariffs, subsidies and export taxes), indirect support (state trading and ownership, investment assistance, and credit and transport subsidies), and statistics on the production, consumption, export, and import market share by country. Commodities listed in the database include corn, cotton, rice, sorghum, soybeans, sugar, and wheat.

The site also includes more detailed information in narrative form on the commodity support in the countries/areas listed above in the Searchable Database. Some of the data goes back several decades. For instance, here's a graph of Australian cotton production, consumption, imports, and exports:

If you're interested in the way other countries subsidize their ag industries, I suggest you check out this site.

Potpourri

Bob Murphy of the Texas Tech Free Market Institute goes through the recent literature on the minimum wage.
Bob concludes:

In the 1980s, there was a genuine consensus that a 10-percent hike in the minimum wage would reduce teenage employment by 1 to 3 percent. However, in the 1990s, various "case studies" began challenging this orthodox view, and more recent studies have generalized techniques to apparently find negligible employment effects. Many economists have used this new research to assure policymakers and the public to pay no heed to warnings about harmful job losses from even aggressive minimum wage hikes.

However, in reality, the employment effect of the minimum wage is still an open question even for modest hikes. Since the 1990s, scores of articles have found negative effects of minimum wage increases. These include "case studies," with one serving as the mirror image of the famous Card and Krueger study. Furthermore, critics have challenged the entire premise of the new techniques, which claim to construct better control groups than the traditional approaches.

Finally, even if we take the very best examples of the "new" results at face value, they provide little comfort that large hikes in the minimum wage—such as a doubling to $15 per hour—will have modest impacts. Policymakers and the public should be wary of the glib assurances of some prominent economists when they claim that such large hikes will not cause teenagers to lose their jobs. The odds are very high that they will.

Arnold Kling has some more thoughts on economic methods.

Two blogs I follow both posted on Instrumental Variables regressions on the same day (here and here). I pointed this out on Twitter and they both wrote responses (here and here). Interesting stuff, but certainly wonkish.

Some interesting commentary on globalization and poor cities in the US from Kevin Williamson.

Peter Klein (and Larry Summers) on behavioral economics as a re-statement of clever (but old and well-known) business practices.
From the article Peter points to:

Have behavioral economists really discovered anything new, or have they simply replaced some wrong-headed notions of post-World War II economics with insights that people in business have understood for decades and maybe even centuries?

Natural Resource Potpourri

I don't have the expertise in natural resource economics to really do a lot of writing on the topic. However, I want to make sure we cover it at least occasionally, so I'll probably stick to this potpourri format for now. I hope some day we find a contributor who is interested in this area.

Lynne Kiesling has a great post on the benefits of retail electric markets. Living in the state of Texas, I can attest to the advantages of this kind of direct competition between providers. Here's Kiesling:

The report’s policy recommendations are in keeping with the idea that market processes provide opportunities for producers and consumers to benefit through experimentation and trial-and-error learning, and that product differentiation through innovation is the most potent form of dynamic competition for creating meaningful consumer benefits.

Digital Trends has an interesting piece on electric vehicles and their actual impact on the environment:

The best outcome for EVs was a 24-percent improvement in global-warming potential over the average gas powered car, and between 10 percent and 14 percent over diesel. These numbers are nothing to sneeze at, but they change radically depending on the source of electricity that EVs are powered on. 

The above numbers rely on the European power mix, which more heavily favors nuclear, hydroelectric, and renewable sources of energy than other parts of the world. 

The global warming potential for EVs that rely on natural gas – generally considered to be the cleanest fossil fuel – show an improvement of only 12 percent over gasoline, and break even with diesel. 

Most alarming, EVs that depend on coal for their electricity are actually 17 percent to 27 percent worse than diesel or gas engines. That is especially bad for the United States, because we derive close to 45 percent of our electricity from coal. In states like Texas, Pennsylvania, and Ohio, that number is much closer to 100 percent. That’s right folks; for residents of some of the most populous states, buying an EV is not only toxic, it’s warming the planet more than its gas-powered counterparts.