in world agriculture. 



Costs lie at or near the heart of every public policy 

 decision — a truism of political life that probably was 

 never more acutely appreciated. Accordingly, I want 

 to discuss some of the major determinants of agricul- 

 tural costs with particular reference to land, water, 

 and energy. I will also offer a few remarks about 

 agriculture and the environment, and about the close 

 relationship of research and education to the availabil- 

 ity of natural resources. 



"Costs lie at or near the heart of every 



public policy decision — a truism of 



political life that probably was never 



more acutely appreciated." 



First, land 



The availability of land to produce food and fiber 

 depends on how much land is converted from agricul- 

 tural to urban and other purposes, and on how much 

 top soil is lost to erosion. I take up these issues in 

 turn. 



In my judgment, the debate over the conversion of 

 agricultural land has focused on the wrong question. 

 Trying to answer the question, "Are we in danger of 

 running out of prime agricultural land because of the 

 conversion of agricultural land to urban uses''", is not 

 likely to yield information helpful to public policy A far 

 more useful question is, "Are food production costs 

 likely to rise in any significant way because of land 

 conversion?" This question is answerable and can 

 serve as a guide to public policy. Even under quite 

 liberal assumptions about the rate of conversion, the 

 cumulative loss of cropland because of conversion is 

 unlikely to exceed 5 percent of the total until after the 

 year 2000. Thus, even if policies designed to slow 

 the rate of conversion had been effective — which 

 they have not been on a national basis — and widely 

 adopted, they would not make a large contribution to 

 future food production. This is not to argue, of course, 

 that the acreage suitable for cropping is not limited, it 

 is, or that there is a great amount of unused land 

 waiting to be developed, there is not. But it is to say, 

 that if we placed the issue in perspective, we see that 

 the problem is a relatively small one that must be kept 

 in perspective, if judged on the basis of food and fiber 

 production 



However, cropland conversion is a most important 



problem to many local areas because of environmen- 

 tal considerations, the loss of open space, or because 

 of its impact on the nature of a community or an area. 

 But it is not wise public policy to try to solve these 

 problems under the guise of a food shortage or rising 

 world food costs If real agricultural product pnces 

 rise, it will not be because of the conversion of 

 cropland to urban users. 



Soil erosion has been the source for a great deal 

 of recent concern Much of it useful because it has 

 directed attention to some most disturbing trends 

 Mainly farmers feel pressured to bring more erodable 

 land into production and the export of grains and soy- 

 beans has resulted in practices that are exploitative in 

 nature Even so, the useful question, "Will soil erosion 

 likely increase the real cost of agricultural production 

 in the future?", is not easily answered, even though it 

 IS possible to offer some generalizations. 



First, the problem, whether it is major or minor, var- 

 ies greatly in severity among regions. Almost all of 

 the worst erosion by water occurs on 10 percent of 

 the land, yet our policy has generally been formulated 

 and executed on the implicit assumption that soil ero- 

 sion is equally serious in all farming regions. 



Second, no one really knows the long-run impact 

 on productivity from continued erosion in excess of 5 

 tons per acre, which is the official "permissible" soil 

 loss figure This is so because soils vary greatly with 

 respect to the effect of soil loss on productivity, 

 because many factors, in addition to erosion, affect 

 productivity, and because future technology is 

 unknown The problem deserves careful and intensive 

 investigation, but I do not believe future costs are 

 likely to rise sharply because of the current rates of 

 erosion But that is indeed a judgment that subse- 

 quent research and experience might well show to be 

 faulty. Furthermore, significant off-farm costs do 

 result from soil erosion. The siltation of dams, for 

 example, and this is an important social problem quite 

 apart from what may or may not be happening to 

 agricultural productivity. 



I turn now to water and agriculture. 



I begin by quoting from a recent RFF study by Ken- 

 neth Frederick, entitled Water for Western Agriculture. 

 "Irrigation has been an important factor in the impres- 

 sive performance of U.S. agriculture in recent 

 decades Irrigated acreage tripled from 1940 to 1977 

 and doubled from 1950 to 1977, periods of great 

 increases in agncultural productivity but virtually no 

 change in total cropland use Average yields are 

 greater on irrigated than on non-irrigated farms, and 

 within the arid and semiarid areas technological 



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