Panelist: 



Emery N. Castle 



President of Resources for the Future, Inc. 

 Washington D.C. 



T, 



hank you very much, Governor It is certainly a 

 pleasure to be in Oregon, and when I get an invitation 

 to come back, I don't usually argue very much, and 

 certainly an opportunity to address the Western Gov- 

 ernors' Conference is very much of an honor. I am 

 saddened, of course, to come back to Oregon and 

 see the depressed economy that exists here, and I 

 feel for the people that I worked with for 21 years, 

 and I feel for the institutions that I was associated with 

 for so long, US agricultural exports have approxi- 

 mately doubled since 1970. This has been caused by 

 population growth abroad, mismanagement of agricul- 

 ture in the Soviet Union and some of the centrally 

 planned economies, and, most importantly, because 

 of income growth in the developing societies. Both 

 political parties in the United States favor even greater 

 expansion of exports. This would please those who 

 are in the business of producing and selling food- 

 stuffs, and the earned foreign exchange would be wel- 

 come as well. 



Yet, I do not believe that the next two decades will 

 see a simple extension of the trends that began in the 

 1970s. Our exports will continue to increase, but they 

 will be limited, shaped and influenced by a number of 

 factors now coming to the fore 



Global international trade in agricultural products 

 has been growing at approximately twice the rate of 

 increase in agricultural production While this rate of 

 growth obviously will not continue indefinitely, interna- 

 tional trade will become increasingly important Many 

 of the developing countries will import more and some 

 will export more, and greater exports are probable for 

 both North America and Western Europe as well. 



The enormous increase in demand for agricultural 



products during the 1970s was generated in large part 

 by people with improved incomes who wish to con- 

 sume more animal products. Add to this the fact that 

 many of the resources of Africa, where hunger will be 

 the most severe for the remainder of the century, are 

 best utilized by livestock Now the full significance of 

 these combined trends has not been fully appreciated. 

 But at least it is clear that great social returns will 

 result from improvements in livestock efficiency. This 

 is not to say, of course, that improvement in plant 

 efficiency will not be important also in the future. It 

 obviously will be. But it is to call attention to the 

 increased importance of livestock over the face of the 

 globe and to indicate anything that can be done to 

 improve livestock production, livestock efficiency, will 

 indeed generate great social returns. Projections 

 made by the International Food Policy Research Insti- 

 tute and others indicate that the United States must 

 contribute handsomely indeed if the global shortfall in 

 food production is not to be very large by the end of 

 the century. 



What then is the ability of the United States to 

 respond to this growing world demand for food? The 

 answer depends importantly on public policy. Cur- 

 rently, for example, the strength of the dollar against 

 other currencies is discouraging exports. The price of 

 U.S. agricultural products has been falling relative to 

 other goods and services within the economy, the 

 domestic economy But those products have been 

 increasing in cost as measured against other curren- 

 cies. Research and educational policies will also 

 affect the productivity of our agriculture, as will price 

 supports and conservation policies. So, I am able to 

 say this morning that politicians do make a difference 



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