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Chapter 6--Agriculture

OVERVIEW

In contrast to many natural resource systems examined elsewhere in this report, agriculture is an intensively managed, market-based system. Worldwide agricultural systems have evolved and adapt continuously to wide geographic differences in climate and to the risks associated with normal climate variability. In the past, agriculture has also been able to adjust to changes in economic conditions--such as the rapid changes in energy prices and export markets over the past two decades. There can be little doubt that the American agricultural sector will make further adaptations in response to changing climate conditions, with market forces rewarding and encouraging the rapid spread of successful adaptation. Yet, the possibility of unavoidable warming and drying in the major agricultural regions of the United States (see ch. 2) argues for examining the potential for coping with climate change and for considering what public action might be appropriately taken in anticipation of an uncertain climate change.

For some farmers, simple adjustments in farming practices or crop selection may transform potential yield losses into gains. But for others, available responses will not compensate for the effects of harsher climates and water scarcity. The current limits to adaptation are well-illustrated by the geographic limits of where crops can be grown now. Without adequate moisture, farming becomes economically impractical. Increases in the intensity of conflicts between agriculture and the natural environment may also limit the extent to which adaptation is possible. For example, if a warmer climate leads to the expansion of intensive farming north into the Great Lakes States, land drainage could threaten ponds and wetlands, and increased use of farm chemicals could add to water pollution. In the arid West, greater demands for irrigation water could aggravate existing conflicts over the use of scarce supplies. Environmental concerns, whether aggravated by climate change or not, appear likely to constrain future expansion of agricultural production. Thus, despite adaptation, the possibility that agricultural yields will be threatened, particularly if climate becomes warmer and drier, cannot be discounted.

In a world where population growth is steadily increasing the need for food, any threat to growth in agricultural productivity must be taken seriously. For American farmers, already facing increasingly competitive world markets, any decline in productivity relative to the rest of the world could mean lost markets. For consumers, a decline in farm productivity growth could mean rising food prices. Estimates of economic effects of climate change on the United States range from damages of $10 billion to benefits of $10 billion (4). If the United States is to have a margin of security against the uncertainties of climate change, continued support is essential for research that enhances agricultural productivity and expands future options for farmers (e.g., new crops and improved farming systems).

Given the scale of the agricultural economy, a series of even small missteps and delays in the process of adaptation could, in the aggregate, prove very costly. Limited information and institutional impediments seem likely to restrict the farmer's ability to respond efficiently to a changing climate. The capability of the agricultural sector to respond to climate change can be improved through efforts to speed the movement of research results and new technologies into farm practice. In a future in which farmers must be increasingly responsive to change, the removal of unnecessary institutional impediments to adaptation is essential. For example, the framework of U.S. farm-support and disaster-assistance programs--which in many cases limit the farmer's incentives to change crops or farming practices rapidly and efficiently--should be reconsidered.

Climate change is almost certain to create both winners and losers, despite agricultural adaptation. Consumers will bear much of the cost of any decline in agricultural yields through higher prices. Some farmers might benefit from higher commodity prices, despite generally declining yields. Even so, other farmers will suffer because of relatively severe local climate changes and because of the inability--caused by a variety of factors--to respond effectively to change. Adaptation might itself result in some undesirable social and environmental impacts, particularly if climate change leads to rapid shifts in the geographical range of crops or in the intensity of farming practice. If climate warms considerably, the range over which major U.S. crops are planted could shift hundreds of miles to the north. Rapid geographical shifts in the agricultural land base could disrupt rural communities and their associated infrastructures. With agriculture and the rural economy already changing rapidly, and with the added uncertainties of climate change, it is impossible to do more than speculate about what effects climate change might have on rural communities.

This chapter provides a brief overview of U.S. agriculture and of the major trends facing it, examines the role that climate plays in agricultural production, and considers whether or not U.S. agriculture can be maintained under a changing climate. The nature of adaptation possibilities and the constraints that may limit the ability of the farm sector to respond successfully to a changing climate are considered. Finally, a potential role for the Federal Government in sustaining or improving agriculture's ability to cope with the uncertainties of a changing climate is discussed.

U.S. AGRICULTURE TODAY

The capacity of U.S. farmers to produce agricultural products far exceeds domestic needs. The United States produces more than half of the world's soybeans and 40 percent of the world's corn (maize). Much of the U.S. farm output is exported (fig. 6-1), and about 30 percent of the Nation's cropland is now producing for export (110). Even these statistics understate the current capacity to produce food. Of some 400 million acres (160 million hectares)[3] of cropland, about 65 million acres were withdrawn from production in 1991 (109) under various acreage-reduction programs, including the Conservation Reserve Program (CRP) (see box 6-A). Approximately 80 million acres now in pasture or forests could be converted to productive cropland if needed (112).[4]

The U.S. Department of Agriculture (USDA) divides the country into 10 regions for the presentation of farm statistics, as illustrated in figure 6-2. About 65 percent of U.S. cropland is found in the Corn Belt region, the Northern Plains, the Lake States, and the Southern Plains (112). Of all the States, California, Iowa, Illinois, Minnesota, Texas, Nebraska, and Florida have the highest cash revenue from farming. Irrigation, rather than extensive farm acreage, accounts for the high value of farm production in several of these States (California, Texas, and Florida). The 17 Western States, Arkansas, Florida, and Louisiana account for 91 percent of irrigated acreage. California, Nebraska, Texas, Idaho, and Colorado account for almost half of the irrigated acreage. Overall, irrigation agriculture makes up only 5 percent of the land in farms and 15 percent of the harvested cropland, but provides a striking 38 percent of crop production, by dollar value (109). Much of this value is from fruits, vegetables, and specialty crops. Figure 6-3 illustrates the regional distribution of cropland and irrigated crop acreage in the United States.

Crop and Livestock Production in the United States

The primary annual crops grown in the United States in terms of economic value and area of land use are the grain crops--corn, soybeans, and wheat (table 6-1). Although grown across the country, most of the output of these three crops comes from the Corn Belt, the Lake States, and the Great Plains. Box 6-B outlines how climate interacts with major U.S. grain crops. The cash value of fruits and vegetables (combined) is about equal to that of grains. Fruits and vegetables are largely grown under irrigation,[5] require a relatively small amount of land, and exist in such extensive variety that it is hard to imagine climate change threatening overall supplies as long as water is available. However, individual growers of these crops may be at some risk of losses under rapid climate change.

Trends in U.S. Agriculture

Slow Growth in Domestic Demand

Domestic demand for agricultural products will grow slowly, probably at no more than 1 percent per year (24). Population growth in the United States, the major determinant of domestic demand for agricultural products, is now at about 1 percent per year, and is expected to drop lower (114). Per capita income growth in the United States, even if it proves to be substantial, is unlikely to add much demand for agricultural products.[6]

Increasing World Demand

Worldwide growth in population and per capita income are such that world agricultural demand may increase by almost 2 percent a year over the next 50 years (20). Much of this new demand will come from developing countries. Meeting the growing need for food will require substantial gains in farm production throughout the world.

Increasing Productivity and Output

U.S. agricultural productivity and yields are likely to continue to grow, but there is much disagreement over whether growth will remain as rapid as it has been in the past. Over the past four decades, U.S. farm yields increased at an annual rate of about 2 percent (24). Future gains in output are expected to be harder to achieve than they have been in the past (83), and gains averaging just 1 percent a year are predicted (112). For the United States, the best prospects for continuing to increase output lie in improved farm productivity. Conventional breeding strategies, more--efficient use of technical inputs, new biological technologies, and new information technologies may all contribute to improvements in farm productivity (103).

Competition for World Markets

With relatively stable domestic demands, U.S. farmers will increasingly look toward export markets. The best opportunity for growth in U.S. exports will be in the rapidly developing, populous countries of Asia and Latin America (24). However, uncertainty about future levels of agricultural production abroad leave it somewhat unclear whether foreign demand for U.S. agricultural products will increase. The advantage that U.S. farmers have long enjoyed in export markets could weaken as gains in productivity in foreign countries lower production costs relative to those in the United States.

Increasing Environmental Concerns

Strong environmental concerns could limit U.S. agricultural output and increase production costs.[7] A portion of the past gain in U.S. agricultural productivity has come at the expense of the environment. Salinization of soils, groundwater contamination, excessive erosion, and loss of wildlife habitat have--in some areas--been the direct result of poor farm-management practices (112). Partially offsetting this has been the decline in land use for agriculture. As crop yields per acre increase, the total land area needed for U.S. agricultural production could decrease by as much as 30 percent over the next 40 years (112), thus reducing many land-use conflicts.

Society's increasing interest in protecting and preserving environmental values has led to stronger environmental policies. In the United States, this has meant taking some agricultural lands out of production (through the Conservation Reserve and Swampbuster Programs) and requiring changes in farming practices (Sodbuster Program). (Box 6-A describes Federal environmental programs related to agriculture; see also vol. 2, ch. 4, of this report.) The trend toward stronger environmental regulation will probably continue, with a likely increase in control over water pollution from agricultural sources (e.g., fertilizers and pesticides). Stronger environmental protection policies may cause agricultural costs to rise, unless technologies that help farmers reduce environmental damage and land-use conflicts are developed.

Changing Farm Structure

The traditional small farm is gradually being replaced by the large, technologically sophisticated agribusiness.[8] Farms producing under $40,000 in annual revenues still account for almost 71 percent of the 2.2 million farms in the United States.[9] However, large farms--the 14 percent of farms with annual sales of over $100,000--now account for almost 80 percent of farm production (91). Small farming enterprises are increasingly less significant to the business of producing food.

Overall, farms are declining in number at 1 to 2 percent per year, with neighboring farm lands being consolidated into single, larger farms (91). As a result, average farm size has been increasing, rising from 213 acres in 1950 to 460 acres by 1990.[10] The trend toward consolidation of U.S. agricultural production into larger businesses will likely continue (24). Along with the increasing concentration of farm production on fewer large farms, there has been a decline in the rural population that depends on farming. On-farm populations declined from 15 percent of the U.S. population in 1950 to less than 2 percent in 1990. The declines in farm and rural populations are expected to continue (62, 101). By the time significant climate change might occur, farming will look much different from the way it looks today.

THE PROBLEM OF CLIMATE CHANGE

Climate change, if it occurs, will be global, perhaps with large-scale winners and losers. There will be regional differences in the pace, direction, and extent of climate changes. Some regions are likely to be helped by climate change, while others are harmed. There is no way of knowing whether gains would offset the losses, but a changing climate would surely affect world agricultural markets and regional patterns of land use on a long-term basis. Not only will there be changes in average climatic conditions, but there may also be a change in the frequencies of rainfall and temperature-related extreme events. Although it is not clear that climate variability will increase, increases in mean temperature alone can lead to more-frequent periods of extended high temperatures (59). The changing frequency of extreme high-temperature events, rather than a gradual rise in average temperature, may present the greatest threat to farmers.

Adaptations made on the farm will be important in offsetting potential declines in yield. In some cases, simple adjustments in farming practices may transform potential yield losses into yield gains. Still, the extent to which adaptation will fully offset any negative effects of climate change might be constrained by cost and by limits to the availability of water and fertile soils. Conflicts over the environmental consequences of agriculture and the use of scarce water resources may become increasingly contentious (see ch. 5), limiting the possibilities for adapta- tion. Warming could eventually shift the potential range of crops hundreds of miles to the north (7). If crop ranges shift significantly and rapidly under a changing climate, communities that depend on agriculture could be greatly affected. Although most studies have concluded that there is no immediate threat to U.S. food supplies (4, 87), the possibility of even moderate reductions in long-term food supplies cannot be ignored as an underlying cause for public concern.

Sensitivity of Crops and Livestock to Climate Change

For agricultural crops, beneficial effects from increasing concentrations of atmospheric CO2 are expected. Crops respond to increased concentrations of atmospheric CO2 with greater photosynthetic efficiency, improved water-use efficiency, and greater tolerance for heat, moisture, and salinity stresses (1, 49, 52). The greater photosynthetic and water-use efficiencies result in larger and more-vigorous plants and increased yields (78).[11] It is not known precisely how the direct effects of higher CO2 concentrations will influence crop yields under actual field conditions. Experimental results suggest that under a doubling of atmospheric CO2 (and otherwise ideal conditions), yields may improve by 20 to 60 percent for crops such as wheat, soybeans, and rice--the C3 crops (5, 49).[12] Yield increases of perhaps no more than 20 percent are expected for corn, sugar cane, and sorghum--the C4 crops. The actual extent of the beneficial impacts from elevated CO2 will depend on there being suitable temperatures and adequate supplies of nutrients and soil moisture.

Several factors may complicate the prediction that rising CO2 will be a blessing for agriculture. The relative growth advantage of C3 plants over the C4 crops could change regional patterns of crop production. If C3 weeds start growing faster, C4 crops like corn and sugarcane could face increased competition from them. (The converse is also true, of course; C3 plants could face reduced competition from C4 weeds.) The nutritional quality of plants and grain might decline because of the changing balance of carbon and nitrogen (a result of increased uptake of carbon). This, in turn, might lead to increased insect damage, with insects consuming more plant material to compensate for lower nutritional quality (6).

Regional warming itself can be either beneficial or harmful. In more northern regions, where cool temperatures result in short growing seasons, the beneficial effects of increased seasonal warmth may dominate. Irrigated crops, which include most of the Nation's fruits and vegetables, should also benefit, especially if longer growing seasons allow double-cropping. Water, if available, can compensate for the stress of high temperatures. But warming tends to speed up the development of plants, shortening the period in which fruit formation and grain filling occurs, and so reduces yields. This effect on yields is especially notable in wheat and corn (2). Warmer nighttime temperatures, even in the absence of warmer daytime temperatures, will increase transpiration and can reduce a plant's ability to recover from the rigors of high daytime temperatures. High temperatures can damage the process of pollination (corn pollen begins to lose viability at 97 deg.F (36 deg.C)) and can damage fruit and flower formation (cotton fruit aborts after 6 hours at temperatures over 104 deg.F (40 deg.C)). High temperatures can stress plants directly, reducing growth rates in most crops at temperatures above 95 deg.F (35 deg.C). Finally, higher temperatures lead to increased evaporation, reducing water availability unless drying is offset by greater precipitation. Because water is generally the limiting factor in agricultural production, any soil drying tends to reduce yields. Corn yields are especially sensitive to moisture stress in the weeks around tasseling.[13]

Crop yields and farm-management costs can be influenced in other, less-direct ways. Changes in the frequency or range of insects and fungal diseases seem likely to result from warmer climates, longer growing seasons, and changes in moisture levels. Pollination may be affected if the timing of plant development is out of phase with the presence of pollinating insects. Climate warming may alter the geographical distribution of existing pests now limited by winter temperatures and may allow for increased rates of successful invasion by exotic migrants. The severity of existing pest problems could be increased as longer growing seasons allow for the development of extra pest generations and as warmer temperatures raise the likelihood that pests will survive through the winter (70; see also ch. 2). Several pests, such as the southwestern corn borer and the corn earworm, could pose a greater threat to Corn Belt production. As a result, pest-management costs may rise. Farmers may also face changes in the costs of drying, storing, and transporting grain. A longer growing season might allow grains to be more fully dried in the fields, thus reducing costs. Grain-transport costs could be increased if reduced water flows limit barge traffic on the Mississippi River, as happened during the drought of 1988 (12) (see box 5-L). Livestock and poultry would also be affected by a warmer climate. Continued exposure of cattle to temperatures above 86 deg.F (30 deg.C) can slow weight gain, reduce milk production, and increase mortality (39, 50). Problems can be amplified if night temperatures rise disproportionately more than day temperatures (47) because animals need cool nights to recover from hot days. Livestock and poultry farming may also be affected indirectly, through changes in the price of feed, in water availability, in diseases, and in the availability and productivity of grazing lands. For example, any decline in acreage planted with crops in the Great Plains would lead to a corresponding increase in the land available for grazing. For the existing grazing lands, changes in soil moisture will have the greatest effect on the plant species composition and productivity (16).[14]

Climate change will threaten agriculture most in areas such as the western Great Plains, where heat stress and droughts are already problems and where increased irrigation would be costly. The extreme crop losses that occur during droughts provide a striking illustration of potential vulnerability. During the drought year of 1988, Illinois corn yields were almost 45 percent lower than previous years' (110). Figure 6-5 shows the sensitivity of U.S. corn yield to drought and other weather-related factors. Cropland now under irrigation in arid regions facing reduced water supplies and increased competition for water will be at risk and will likely require increasingly sophisticated water-conserving technologies. In Western States, for example, warming could lead to a reduction or earlier melting of the winter snowpack that now provides much of the region's irrigation water (see ch. 5). On the other hand, if moisture levels increase and allow a northwest shift of the Corn Belt into the deep, fertile soils of the Dakotas, there might be little threat to yields. An expansion of the Corn Belt into that region is already under way (84). Over the past decade, plant breeders have developed corn varieties with a shorter growing season and thus have extended the corn region several hundred miles to the north.

The various effects of climate changes on agricultural yield are only suggestive of the potential economic harm from climate change. Exactly how consumer food prices and the profitability of agriculture are affected by climate change will depend on the aggregation of farmlevel responses to changes in climate. Large-scale adjustments in the location and intensity of food production have the potential to offset much of the direct effect of climate change. Box 6-C describes some studies that have looked at the market responses and economic effects of climate change.

Conflicting Goals and Competing Demands for Water

So much land and water is used for agriculture that any climate-induced changes to agriculture would have profound effects on competing uses for these resources (see ch. 5 and vol. 2, chs. 4 and 6). Cropland and pasture account for 30 percent of land use, and irrigation of agricultural land accounts for 84 percent of consumed water (88). Land and water resources are particularly vulnerable to expansion of agricultural activity and to increases in the intensity of irrigation or in the use of farm chemicals. Many agricultural States have already lost much of their original wetland area (see vol. 2, box 4-E) and forest cover to agriculture.

Competition for scarce water is likely to be particularly important under climate change (3, 4). Whether increases in irrigation are possible will depend on water availability and costs. If withdrawal of water for agriculture does increase, wildlife habitat and other services that depend on freshwater flows will be increasingly threatened, particularly if climate change reduces or alters the seasonal timing of stream flows. On the other hand, without sufficient water for agriculture, farm yields will be reduced. The western regions, already facing water shortages, may see renewed pressures to construct large water-resource-development projects (see ch. 5). These projects have in the past been in conflict with the goal of protecting natural habitats.

Water quality may also be affected by a changing climate. Farm chemicals and wastes can infiltrate groundwater, and surface-water runoff and drainage can carry salts, farm chemicals, and sediments to adjacent water bodies (see box 6-E). With altered patterns of precipitation and regional agricultural activity and with altered dilution rates in streams and aquifers, the nature of the water pollution problem on a regional scale could change substantially. Concern over pollution from agricultural sources may limit the extent to which agriculture can adjust to climate change.

Although an overall expansion in cropland seems unlikely (112), spatial shifts in the pattern of land use may still be disruptive to natural environments (4). For example, increases in farm acreage are projected in the environmentally sensitive lands of the Lake States and the erodible lands of the Northern Plains. As a result of climate change, economic forces could bring an additional 3 million acres into new production in the South, with much of this cropland created by the clearing of forests (23). Such an expansion of farming into highly erodible or environmentally sensitive lands would be inconsistent with environmental goals (see box 6-A).

TECHNOLOGIES FOR ADAPTATION TO CLIMATE CHANGE

Agricultural adaptations that draw on current practices may be effective for a time in dealing with climate change. There is a reasonable chance, though, that climate change could eventually overwhelm the effectiveness of current adaptation possibilities. That is a compelling reason to consider the long-term prospects for new technologies. Long-term adaptation may require fundamental improvements in the technologies available to farmers. In the past, expansion of agricultural technology has occurred both as a market-induced response to a changing environment and through publicly supported efforts aimed at overcoming perceived resource constraints. U.S. farming has been supported in this by: 1) a sophisticated system of agribusiness; 2) a publicly supported land-grant university, research, and extension system that channels technology to farmers; 3) a transportation infrastructure organized to move food rapidly from the farm to an interlocking system of local, regional, national, and world markets; and 4) a market economy that quickly rewards successful adaptation. These institutions have provided U.S. agriculture with the ability to adapt to rapidly changing economic conditions and should, if well-maintained and directed, provide the basis for future adaptation to climate change.

Adaptation may be slowed by impediments to flexibility in crop choice, such as those imposed by Government farm-support programs (54). The net effect may be to discourage transition to cropping systems that are better suited to the changed climate. Uncertainty and inadequacies in the information available to farmers, both about climate change and effective responses to it, could slow the rate of adaptation. Policies that restrict or distort agricultural markets are also important constraints to effective adaptation (18, 20). The subsidies provided to farmers in some countries tend to discourage farming in regions where agriculture is more productive, and so raise overall costs of world food production.

Ultimately, the ability of agriculture to adapt to a changing climate may be most dependent on continued success in expanding the variety of crops and techniques available to farmers. Biotechnology appears to offer hope of continued improvement in agricultural productivity well into the next century. Expected improvements in overall agricultural productivity and plants with increased tolerance to pests, drought, and heat all offer the chance for increased buffering against the direct risks of future climate change. The success of these and other potential improvements in farm management and productivity will be increasingly sensitive to how well new knowledge is transmitted to the farmer. The role of agricultural research and extension in conveying information to farmers and in promoting innovation is likely to take on increased importance under conditions of changing climate. Research must be tied to the development of information and management technologies if it is to remain a source of improved productivity (85). In the absence of such a focused effort to tie research to the needs of farmers, promised gains from new technology may not materialize.

Current Technologies for Adaptation to Climate Change

Prospects for Future Technologies

Biotechnology

Biotechnology involves the use of molecular genetic tools to modify plants, animals, or microorganisms. By using recombinant-DNA[15] and cell-fusion techniques, scientists can isolate, clone, and study individual genes. Such knowledge allows for direct modification of the genetic structure of plants and the development of micro-organisms or biochemical products, such as enzymes and hormones, that will improve the growth and performance of agricultural crops and livestock. Biotechnology does not itself provide new cultivars, but rather provides the source material for more-rapid advances through conventional plant breeding. A National Research Council study suggested that Federal support of biotechnology needs to be expanded if long-term advances are to be achieved by the time they are needed (63).

New tissue-culturing and genetic-engineering tools combined with traditional agricultural breeding methods are allowing scientists to alter plants to incorporate greater disease, insect, and weed resistance, and to better withstand environmental stresses such as cold, drought, and frost. These techniques are also improving the understanding of plant resistance and are allowing the development of improved pest-control agents. Crops that exhibit increased insect resistance and herbicide tolerance are expected to be commercially available by the middle to late l990s (103). Plants with improved resistance to diseases should become commercially available over the next decade or so.

Improved insect resistance in plants has been achieved by introducing genes that produce the toxin from the bacterium Bacillus thuringiensis (a natural insecticide). Some success is also occurring in attempts to develop crops that are resistant to the broad-spectrum, environmentally safe herbicide glyphosate. Soil microorganisms that can control weeds and soil-borne nematodes and insects are also being developed. All of these new ways to control pests biologically offer hope for reduced use of herbicides and insecticides.[16]

Progress in improving tolerance to water and heat stress is complicated by a lack of knowledge about the physiological mechanisms of stress. Thus, genetically engineered plants tolerant to such climate stresses are unlikely to be developed in this decade (103). Development of commercial plant varieties with improved nutrient intake (i.e., they use fertilizers more efficiently) also appears unlikely within the next two decades. A better understanding of the key roles that associations between microbes and plant roots play in the use of nutrients--often supplied in the form of fertilizers--is still needed. If nutrient uptake can be improved, a secondary benefit would accrue in water-quality improvements because fertilizer losses to surface and groundwater are a significant source of pollution problems (as well as being costly to farmers).

Information and Management Technologies

Future improvements in productivity may increasingly rely on the development of information and management technologies and the effective transfer of knowledge to farmers (85). Improvements in information technologies and the technology of farm management offer alternatives to the intensified use of traditional farm inputs as the basis for expanded agricultural production. Improved efficiency in the use of farm inputs and practices can increase productivity and has the potential to reduce the environmental costs associated with farming. Central to this is improved understanding of plants, animals, and farming systems, which may rely on the increased use of computers, better computer software, the use of smart machines and control systems, in-field and remote sensing, geographical information and imaging systems, and electronic networks or other communication technologies.

Although computers have already had an impact on farm management, they could contribute a lot more. Systems for livestock management and for access to weather and marketing information are the best-developed applications to date. The earliest new applications of computer software technology to attain broad use may be simple "expert systems" that help the farmer diagnose and respond to very specific production problems, such as disease (103). More complete decision-support packages for farm management might begin to be available within a decade (103). Much effort is still needed in the development of crop-simulation models to support integrated-decision-management software.

The potential for the use of advanced technologies is already being demonstrated on farms that grow highly valued crops. The means exist for sensing temporal and spatial variations in field conditions and delivering irrigation water, fertilizer, and pesticides to each area of the field precisely as needed. Irrigation of highly valued crops is now automated on some farms; it relies on computer programs, soil-moisture sensors, and weather-data networks (17). Farm machinery that can selectively till, weed, or fertilize only those areas in need of attention is also being produced commercially. Widespread use of advanced agricultural technologies and computerized information services is not likely to occur until costs decline significantly and the technologies have been adapted for a wider range of production systems.

Information-retrieval systems, allowing farmers access to electronic networks and collections of farm-management information based on compact-disk read-only memory (CD-ROM), are likely to be available by the mid-1990s. The packaging of information and decision-support technology in a manner that makes it useful to farmers will be critical to enhanced farm productivity. The extension services and the private sector will need to be prepared to take advantage of the new communications techniques to deliver effective and integrated decision-support services. The USDA Agricultural Research Service has recognized the importance of research into integrated management systems and information technologies. However, research on and teaching of computer software and computer-assisted-management tools are not yet well-established in agricultural schools (103).

New Crops and Cropping Systems

The idea that new crops could help stabilize and diversify the farm economy is hardly new. Only a handful of crops is being readied for possible commercialization in the near future (72, 102). Cuphea is an oilseed that can replace imported coconut oil in soaps and detergents, but commercialization will depend on the development of varieties that retain their seeds better. Crambe and winter rapeseed provide erucic acid, used to produce plastics and lubricants. Crambe tolerates climate conditions similar to wheat. Winter rapeseed can be double-cropped, grown over the winter in the Southeast and southern Midwest.[17] Both could be commercialized quite rapidly under current conditions. Guayule produces a high-molecular-weight rubber that is well-suited for use in tires. The guayule plant tolerates the arid conditions of the Southwest, but problems with low yields must still be overcome.

Jojoba is a desert evergreen with seeds that provide a substitute for sperm oil and for some petroleum-based oils. Jojoba oil is already used in the cosmetics industry and may be useful in commercial waxes, lubricants, and polishes. Bladderpod tolerates low annual rainfall, and its seeds contain oils that substitute for castor oil in plastics production. Continued efforts in plant breeding are necessary to increase the oil content and yields. Kenaf is a warm-weather plant that produces a fiber with a cellulose content similar to that of wood. The fiber can be used in high-quality newsprint, cardboard, and high-quality paper. Late-season dryness and some salinity are tolerated, but there must be adequate water during the initial period of germination and growth. Kenaf appears to have considerable promise for commercialization.

New crops have their own drawbacks, however. It is difficult to develop new markets when existing crops or synthetic chemicals are competing for them. A limited genetic base can slow cropbreeding advances and may leave crops vulnerable to unanticipated pests and disease. By and large, new crops succeed only when they are safer and cheaper than the old or fit a unique market niche.

Several Federal programs fund research and development of new crops or new uses for existing crops. The Food, Agriculture, Conservation, and Trade Act of 1990[18] (P.L. 101-624), for example, established the Alternative Agricultural Research and Commercialization Center within USDA to provide research and financial assistance in commercializing new nonfood products from agricultural commodities. Less attention is given to new food crops because these tend to compete with existing farm products. There are, however, various food crops grown elsewhere in the world or with limited production in the United States (e.g., sorghum and various minor grains and grain legumes) that may offer opportunities under climate change. New specialty crops, multicropping approaches, and integrated agro-forestry and livestock operations may become viable future options for smaller farmers who do not have the capital to rely on high-technology farming.

THE INSTITUTIONAL SETTING

Commodity programs are of three types: price support, income support, and supply management. Although not viewed as buffers against climate risk, the commodity programs do provide participating farmers with protection against the low prices that result from bumper-crop yields. The costs of these commodity programs are shown in figure 6-6.

The disaster-assistance programs, including disaster payments, crop insurance, and emergency loans, provide direct relief to farmers suffering weather-related losses. In recent years, Congress has provided disaster payments for losses beyond some specified percentage of normal yields (35 to 40 percent in 1992), providing partial compensation to any farmer suffering losses in excess of that amount. Low-interest emergency disaster loans are available to family farmers experiencing crop losses of at least 30 percent. Individual farmers become eligible for emergency loans once their county has been declared a disaster area by the President or the Department of Agriculture. Federally subsidized crop insurance is also available to almost all farmers. Farmers may insure up to 75 percent of their average crop yield, receiving payment on additional losses if weather causes yields to fall below the insured level. Up to 30 percent of the cost of insurance is paid for by USDA. Federal expenditures on disaster-assistance programs are shown in figure 6-7.

U.S. public-sector agricultural research and extension is a dual Federal-State system that is credited for much of the remarkable growth in America's agricultural productivity. Public research expenditures in agriculture have produced high returns (32). Much of this success can be attributed to the effective transfer of knowledge to farmers and to a decentralized structure that has maintained a focus on practical research problems (82). The public agricultural research system includes the State Agricultural Experiment Stations (SAESs) and USDA's Agricultural Research Service (ARS) and Economic Research Service (ERS). The Cooperative Extension Service (CES) is the network of Federal, State, and local experts that delivers research results to farmers and feeds problems back to researchers. USDA's Soil Conservation Service (SCS) also serves a technology-transfer role, encouraging soil and water conservation in farm management. (Box 6-J discusses the USDA departments and their activities in more detail.)

Private research by food and agricultural industries and innovation by farmers have also played a significant role in sustaining agricultural productivity. Increasingly, agricultural industries are conducting their own research whenever there is the possibility for developing proprietary products. However, industry has relied on the public sector to provide funds for much of the basic research and evaluation.

Despite the strength of the overall agricultural research establishment, there has been some debate about how well it is prepared to deal with the future (10, 73, 99). Federal funding for agricultural research has seen little or no increase (in deflated dollars) over the past two decades (see fig. 6-8). Hope for future improvements in agricultural productivity has increasingly come to rely on advances in basic science achieved outside the traditional agricultural-research structure. As funding goes increasingly to new and specialized areas of scientific research, traditional research addressing the day-to-day problems that plague agricultural production may be neglected (100). Federal funding for the extension services has also declined (in deflated dollars), while their mission has broadened beyond providing for the traditional family-farm constituency (73). Observers question whether the State or county extension service agents still have the expertise to assist farmers in undertaking new technologies. Encouraging basic science while maintaining an effective link between scientific research and real farm problems is a challenge that will require a broadening of the capabilities and reach of the existing research and extension system.

POLICY OPTIONS

The ability of farmers to adapt to climate change may be constrained by several factors: 1) inflexibilities imposed by commodity support programs, 2) inflexibilities in disaster-assistance programs, 3) increasing competition for scarce water, 4) technical limits to increased productivity, and 5) an inadequate framework for planning the long-term needs of the agricultural sector. Each of these factors and related policy options are discussed below.

Commodity Support Programs

The deficiency-payment programs result in the greatest disincentive for farmers to switch crops (see box 6-I). First, crop choice is often driven by the level of support payments rather than by market prices. Relatively high target prices, such as those seen in the past decade for corn, discourage a switch to crops that might otherwise be more profitable at market prices. Second, because support is linked to establishing and maintaining a record of continued production in a particular commodity, farmers are penalized when they do switch crops. With the distortion of underlying market-price signals and penalties for crop switching, farmers may persist in growing crops that are not well suited to changed climate conditions. The public will bear the costs of this misallocation of productive effort through higher commodity prices or program costs.

The deficiency-payment programs have also been criticized for discouraging sound management and leading to an expansion of farming into marginal lands, many of which are highly erodible or otherwise environmentally sensitive.[19] Because traditional rotation crops such as leguminous forages, are not covered by any support programs and detract from the acreage in program crops, farmers are discouraged from engaging in sound rotation practices (100). This exacerbates erosion and encourages the use of chemical fertilizers.

Equally serious are the problems that result from coupling deficiency payment to farm yields. Because deficiency payments are directly related to output, farmers have a strong incentive to maintain high yields through the intensive use of farm chemicals. The price subsidy also encourages an expansion of agriculture into marginal lands. At the same time, under the Conservation Reserve Program, the Wetlands Reserve Program, and various water-quality incentive programs, farmers are paid to remove erodible lands from production and to reduce environmental damages. This is why the farm programs have been compared with "driving a car with one foot on the gas and the other on the brake."[20] The expansion of farming into marginal lands and the discouragement of conservative farming practices expose the public to risks of higher program costs and greater disaster-assistance needs under climate change, along with the likelihood of increased environmental damage.

Partly in response to these concerns, the 1990 Farm Bill as amended by the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) introduced some degree of flexibility into the deficiency-payment programs. Farmers may now shift up to 25 percent of their program acreage base to the production of other crops, without having that acreage removed from the program base--that is, from the total acreage used to calculate their benefits. On 15 percent of the base acreage (normal flex acres), there are no deficiency payments but the farmer is free to switch to other crops.[21] An additional 10 percent of the base acreage (optional flex acreage) may also be switched to other crops, but deficiency payments are lost if the land is planted in other crops (see box 6-I). As a budget-reducing measure, an increase in the normal flex acres to 20 or 25 percent is being considered in the FY 1994 budget reconciliation.

Policy Options: Commodity Support Programs

A concern with the NCA approach is that it reduces USDA's control over the supply of individual crops because acreage set-aside requirements can no longer easily target specific crops. This lack of control raises concerns about increased instability in farm prices. Farmers now growing crops without program support have expressed concern that they will be unfairly exposed to new competition from supported farmers who switch crops (participation in most commodity programs is voluntary). Another concern is that farmers' crop choices may still be driven largely by the target prices set for individual crops, thus limiting responses to climate change and market prices. To deal with this, some uniform method for setting target prices is needed. Alternatively, the current deficiency-payment programs could be replaced with an income-support program that is not coupled to crop production.[23]

Option 6-2: Increase flex acreage. The flex-acreage approach appears to have been successful in introducing some flexibility in crop choice[24] and in reducing the potential costs of commodity programs (through the elimination of deficiency payments on normal flex acres). Congress could gradually increase normal or optional flex acreage in successive farm bills, further adding to farmers' flexibility in crop choice.

Normal flex acreage could be increased to at least 25 percent in the next farm bill. Because deficiency payments are withdrawn on normal flex acres, the costs to the Government of commodity programs would also be reduced.[25] Subsequent farm bills could further increase normal flex acreage. Gradually phasing out farm support in this manner appears to follow the direction set by the 1990 Farm Bill, avoiding the substantial difficulties associated with any full restructuring of commodity programs. However, linking increased flexibility to reduced farm support may prove hard for farmers to accept.

An alternative would be to increase optional flex acreage. So far, however, farmers have shown little interest in using the optional-flex-acreage allowance because program support is lost when the acreage is planted to new crops (an indication of how much the support programs do influence the behavior of farmers). Still, an increase in the optional flex acres may offer somewhat more flexibility than now exists, allowing farmers to respond to significant changes in market prices and growing conditions. A farmer who uses optional flex acres maintains eligibility for program support, regaining support if the land is replanted to the program crop. This protection somewhat reduces the risks involved in changing crops.

Disaster-Assistance Programs

The costs of disaster-assistance programs (crop insurance, disaster payment, and emergency loans; seebox 6-I) can be expected to rise if climate change leads to more-frequent episodes of drought and related crop losses. The subsidies provided by these programs reduce farmers' incentives to recognize and adapt to increasing climate risks, which imposes further costs on the general public. Reducing these subsidies will better prepare the farm sector to respond to changing climatic risks and should also prove beneficial in reducing conflicts between agriculture and the natural environment.

Society does benefit from stable food prices, and well-designed risk-spreading programs contribute to this stability. Disaster-assistance programs should be restructured--not eliminated--to encourage farmers to limit their exposure to climate risk and thus to lower the costs of the programs to society.

Policy Options: Disaster Assistance Programs

Currently, disaster-assistance programs compensate farmers who have experienced crop losses of at least 35 to 40 percent. Partial compensation is received for losses greater than that amount.

• Congress could set the trigger for compensation to a level that is less frequently exceeded (say, a loss of 55 or 60 percent).
• Alternatively, coverage could be eliminated for farmers who have repeated losses. For example, farmers might be limited to receiving payments two times within any 10-year period.

A permanent disaster-payment program could be authorized, providing payment to any farmer who experiences significant weather-related losses. With universal coverage, potential inequities that result if eligibility is limited to farmers in declared disaster areas are removed. One of the strongest objections to eliminating crop insurance (that to do so strips farmers of individual protection against climate risks) would thus be removed. However, with a permanent and universal program of disaster payments, expenses might become less controllable.

• To reduce budget expenses, farmers or farm counties could be required to contribute to a disaster-assistance fund in order to be eligible for disaster payments.

Recent disaster-payment programs have set payments based on losses relative to "normal" production. This is usually based on average yields over a period of years, with extreme yields (either high or low) excluded from the average. It would seem unwise to exclude "abnormal" years from the average if climate change is in fact altering normal climate.

• Congress could require that a moving average of crop yields over the past 5 years be used to determine normal output.

Option 6-4: Combine disaster-payment and crop insurance programs. Congress could combine disaster payments and crop insurance, giving all farmers free catastrophic-loss coverage (partially compensating for losses beyond some high limit) and offering additional coverage to those who are willing to pay. The Federal Crop Insurance Reform Act of 1990 considered by the 101st Congress would have provided such a combined disaster-assistance program. All farmers would have received disaster protection for losses exceeding 50 to 70 percent (depending on participation in other farm programs). The crop insurance program would have remained essentially unchanged, with subsidized coverage available for crop losses greater than those covered by the catastrophic policy.

Proponents of the plan argued that it would eliminate the pressure for supplemental disaster legislation and would encourage farmers to protect themselves against ordinary climate risks. Opponents were fearful of the potential costs. Although administrative expenses and the insurance subsidy would be largely unchanged, expenditures on disaster payments could increase with universal coverage. Opponents also expressed concern that the proposed plan would eliminate any chance of making the crop insurance program sound.

Option 6-5: Improve the crop insurance program. In principle, crop insurance provides an attractive mechanism by which farmers can reduce the inherent variability in farm income. However, few would argue that the goals of the Federal crop insurance program have been met. Participation is limited, program costs are high, and disaster payments remain a primary cushion against climate risks. Because of the high cost of insurance and the expectation of continued disaster payments, participation in the crop insurance program is primarily limited to farmers in high-risk areas.

Several potential reforms of the crop insurance program were suggested to Congress during debate of the 1990 Farm Bill (13, 14).[26] Some analysts and researchers have sought to reduce subsidies on crop insurance, hoping to make the program actuarially sound (i.e., self-supporting). Many have sought to encourage greater program participation through increasing subsidies, reducing deductibles,[27] improving administrative procedures, modifying in the means by which losses are calculated, or requiring crop insurance for eligibility in other farm programs. A more radical reform would combine crop insurance and income-support programs into a revenue insurance scheme that would guarantee a minimum farm revenue.

Congress could choose to revisit the many reforms that have been suggested in the past. The success of any reforms in the crop insurance program would be contingent on expanded participation, which would allow crop insurance to replace disaster payments. The resulting restructured program might then offer both improved risk management and reduced costs over the current combination of crop insurance and disaster assistance programs. However, if greater participation is achieved through higher subsidies and lower deductibles, these benefits might well be lost.

Option 6-6: Provide a self-insurance program for income stabilization. Congress could consider a program modeled roughly on individual retirement accounts (IRAs), under which farmers would be encouraged to self-insure against climatic risks. The program could be supplemented with catastrophic coverage either through crop insurance or disaster payments, and it would

allow farmers to smooth the fluctuation in their income over time.[28] Farmers would be allowed to set aside income, tax-free, into a self-insurance account. Annual deposits up to a maximum amount (say, $15,000) would be allowed, with no further deposits allowed once the account reaches some maximum cap (say, $150,000). The cap would encourage active use of the account for income smoothing, and the tax-free status would encourage participation. Withdrawals could be made at any time, subject to income tax payment at that time (with no penalty for early withdrawal, in contrast to the IRA model). Existing disaster programs might be gradually phased down, until they provide only protection against truly catastrophic events.

Water Use Efficiency

Policy Options: Water Use Efficiency

Agricultural Productivity

Conventional breeding efforts should not be ignored as a source of productivity gains in the near term. The ability to manipulate complex genetic characteristics through biotechnology remains limited.[30] For example, conventional breeding may offer the best immediate hope for improving drought and heat tolerance in crops. Efforts to expand the diversity of available cultivars through crop breeding may provide insurance against an uncertain future climate. Attention to the development and commercialization of new crops may become more important in a future under which climate change might threaten the competitiveness of traditional crops. Public efforts will be needed for those crops and market or climate niches that receive little attention from commercial breeders. It may be important to develop crops and cultivars that are adapted to warmer or drier climate conditions. Efforts toward developing cultivars that require small amounts of farm chemicals would help relax the environmental constraints that might otherwise limit expansion of farm output.

Equally important are efforts to enhance the knowledge and skills of farmers and the technology of farming. Farmers face a future in which they must be increasingly responsive to world competition, environmental concerns, and the uncertainties of climate change. The competitiveness of the U.S. farm sector will increasingly come to rely on its ability to farm with greater skills than the rest of the world. One of the most important attributes of future technologies will be the ability they give farmers to deal with unanticipated changes. Information and management technologies in the form of computer software, sensors, robotic and control equipment, and other packaged-knowledge products can provide this flexibility. These intelligent farm technologies offer the potential for substantial gains in efficiency of farm management and for reductions in agriculture's undesirable environmental consequences. The role of technology transfer also takes on increased value under a changing climate. If farmers are to adapt to any sort of change in a timely manner, efforts must be made to provide them with accurate, convincing information on the effectiveness of new farming systems, crops, and technologies. The private market may respond to meet some of these needs, but a public role seems imperative.

Policy Options: Agricultural Productivity

The potential to develop and expand the use of intelligent information and management (i.e., using land-based or remote sensors, robotics and controls, image analysis, geographical information systems, and telecommunications linkages--packaged into decision-support systems or embodied in intelligent farm equipment) to improve crop and livestock production and farm-resource management is considerable. Tractors are now produced commercially that can plant, till, or apply chemicals as needed to specific areas of a field. There are also commercial packages (including computer hardware and software, sensors, and telecommunications linkages) that can control irrigation and provide decision support for fertilization and pest-control application. Only farmers growing the highest-valued crops (such as fruits and vegetables) can afford these systems now.

Long-term public funding has been essential to the development of the few existing commercial packages. Enhancing these systems and reducing equipment costs to allow broader application will require considerable research and development effort. ARS proposed a program of research on intelligent farm-management systems under the Federal Coordinating Council for Science, Engineering, and Technology's (FCCSET's) 1994 Budget Initiative on Advanced Manufacturing. ARS expects that $1 million will go to integrated, or intelligent, farm-management-systems research. ARS had initially hoped for a larger role in the FCCSET initiative, sufficient to provide $6 million for intelligent farm-management-systems research. The strategic plan for the State Agricultural Experiment Stations also considers this a high-priority area for new research, suggesting a need for $47 million in new funding (33). No other single area was considered to need this large a funding increase.

Option 6-11: Improve the research and extension process by expanding farmer input. Congress could support an expanded role for farmers in assessing the effectiveness of farming practices and in disseminating results of research on innovative farm practices. A broad-based program of grant support for systematic on-farm experimentation and a database on farmers' financial successes and failures under different farming systems could help farmers adapt to climate change.

Farmers are most convinced by the success of other farmers--rather than by information from experiments conducted on university lands under ideal management conditions. State experiment stations have already found that demonstration plots on farms are excellent teaching aids and succeed in getting farmers to more quickly adopt certain practices. The willingness of farmers to take up new techniques (including techniques designed to reduce the environmental costs of farming) could be further enhanced if farmers were more extensively included in the research, experimentation, and information-dissemination process.

• Support on-farm experimentation. A broadbased program of support for on-farm experimentation in new cropping practices would be useful in providing the information that would help farmers adapt to climate change. A model that could be built on for this purpose can be found in the Sustainable Agricultural Research and Experiment (SARE) program funded under the 1990 Farm Bill (see box 6-A). Under this program, Federal funding is provided to experiment stations to support farmer participation in research and on-farm demonstration projects. One possibility is to pay farmers for conducting field tests to demonstrate the success or failure of new farming systems in real-world situations, working with experimentstation, Soil Conservation Service (SCS), or extension-service personnel.[31] Farmers could be compensated if they bear the risks of trying unproven technologies.

• Develop a database on successful practices. In conjunction with a program of on-farm experimentation, there could be support for a wider program of recordkeeping to establish a database on the financial successes and failures of farming systems. An easily accessed database, giving farmers access to records and information on successful farm-management practices, could help speed adoption of successful practices. Such databases could be developed and maintained at State experiment stations (or distributed on compact disk) and be made accessible by phone line to personal computer users. Software that could provide easy access to the database and efforts to organize the database into a useful format would be required. Cooperative support for farmer-initiated networks and information exchanges might be another way to increase the efficiency with which farmers accept innovations in farming practices.

Option 6-12: Support agricultural biotechnology and genetics. Congress could maintain or increase funding for regional centers of excellence in agricultural genetics and biotechnology research. Increases in competitive grants in areas of particular interest could be used to direct the research effort. Areas of obvious long-term national interest include programs addressing the understanding of photosynthetic efficiency, nitrogen fixation, tolerance to heat and drought, and the development of crops that require reduced herbicides or pesticides. Although climate change does raise the importance of research about drought and heat tolerance, this area should be promoted in tandem with pursuing broader gains in productivity, where the probability of success and the ultimate payoff may be higher.

Option 6-13: Support conventional cropbreeding programs. Congress could encourage USDA to sustain or increase public, conventional crop-breeding efforts. Crop breeding offers the most immediate hope for providing improved cultivars that are adapted to particular climatic niches. This may be especially so given the number of "wild" varieties that have yet to be studied and that could improve the existing domestic crops. Efforts at expanding diversity in cultivars are not adequately supported by the private sector unless investors anticipate profitable markets. Conventional breeding is also considered necessary for the maintenance of desirable cultivar attributes. One consequence of ignoring this maintenance effort can be an increased need for pesticides to compensate for declining resistance to pests. This unglamorous side to breeding has been underfunded. Further, breeding of minor but potentially valuable crops, such as forages, small grains, and oats, may be getting too little attention from either the Government or the private sector.

Option 6-14: Increase support for the development of new commercial crops. Development and introduction of new commercial crops can be a slow process. Successful commercialization relies on a combination of farmer and market readiness that may be difficult to achieve. Availability of new crops might provide U.S. farmers with opportunities to diversify to counter the threat of climate change or a chance for profitable specialization. Congress could expand ongoing USDA research aimed at improving the commercial characteristics of several promising alternative crops. Priorities should be given to crops for which there are potentially profitable markets and perhaps to crops suited to hot or dry conditions. Congress could authorize assistance to businesses to establish crops and product markets, once the development of commercially stable varieties has been demonstrated.

Planning Needs

USDA currently provides periodic assessments of agricultural soil and water conditions and trends under the appraisal process, authorized by the Soil and Water Resources Conservation Act (RCA) of 1977 (P.L. 95-192). Despite the considerable background effort that goes into these analyses, the assessments are narrowly focused on the specific concerns of USDA's Soil Conservation Service. With little extra effort, USDA could provide a full assessment of trends in the agricultural resource, farm ownership, rural economic conditions, agricultural technologies, supply and demand, and the impact of farm programs and subsidies. Included in this evaluation could be an assessment of climate change as one of many possible significant future disturbances to supply and demand, as the Forest Service has been doing. On the basis of this assessment, USDA could develop a program document that clarifies the agency's direction and justifies its programs as a whole.

Policy Option: Planning Needs

FIRST STEPS

• removing the impediments to adaptation that are created by commodity support programs, disaster assistance, and irrigation subsidies;

• improving technology and information transfer to farmers in order to speed the process of adaptation and innovation in farm practice; and

• supporting research and technology that will ensure that the food-production sector can deal successfully with the various challenges of the next century.

The agricultural sector of the U.S. economy is already unusual in the great amount of public money spent in support of research, development, and technology transfer. The steady stream of technological improvements that have resulted has allowed the United States to feed a growing world population at increasingly low cost. In recent years, the focus has shifted away from how effective the effort has been, pointing instead to the expense of farm programs and the environmental consequences of intensive farming. However, if the United States wants to remain competitive in the world market even though rapid population growth is increasing the demand for food while biological limits to productivity growth seem ever closer, public efforts to support the continued growth in agricultural yields remain necessary. With its technological and institutional strengths, the Nation should be in a position to enhance its role in a growing world agricultural market. But in the competitive world market, success will rely on continued improvements in productivity and on the skills of U.S. farmers as they innovate and adapt to changing market conditions.

Climate change adds to the importance of efforts to increase agricultural productivity, to improve the knowledge and skills of farmers, and to remove impediments to farmer adaptability and innovation. Efforts to expand the diversity of crops and the array of farm technologies ensure against a future in which crops or farming systems fail. Efforts to enhance the adaptability of farmers--to speed the rate at which successful farming systems are adopted--can lower the potentially high costs of adjusting to climate change.

All of the options described in the previous section are of some value if implemented today, even if no climate change occurs. Many options, particularly those related to research and extension, are being pursued to some degree. Others, such as the options to modify commodity support programs, disaster assistance, and irrigation subsidies, have been much discussed. In general, climate change strengthens the case for actions already being considered or under way rather than suggesting new directions of effort.

Several of the options we have suggested should be addressed promptly. Research on information and management technologies is important now because of the time needed to develop and implement new technologies and because of the lack of effort now being made (33). Modifications to the farm commodity program are included as first steps because there appears to be a window of opportunity to implement changes. Disaster programs fit in much the same category; frustration with current programs makes some political action likely. The difficulty experienced in redesigning the agricultural programs suggests all the more that these reforms be placed on the agenda early so the process of change can begin. Although conventional crop breeding has not been included in the list of first steps, it is an area that merits more attention. Efforts to improve or maintain the desirable cultivars appear to be underfunded for many crops--as more glamorous research areas have attracted public funds and private efforts have focused on larger markets.

Some areas of obvious concern. such as biotechnology research and new-crop development, have not been included as first steps. This is not because they are unimportant or not urgent, but rather because there is considerable effort under way already. Improvement in the effectiveness of the extension process, through more deliberate inclusion of farmers and better dissemination of data, may ultimately be of great importance. However, there seems to be little cost to waiting before implementing such actions. Perhaps most important here is that existing technology-transfer services should not be allowed to decline to the point that they cannot be rebuilt. Institutional changes that will encourage the conservation and efficient use of irrigation water will also be important in buffering agriculture against the threat of climate change. (See ch. 5 for a discussion of water issues.)

• Revise the commodity support programs to encourage responsiveness to changing climate and market conditions. Congress addresses farm issues every 5 years in omnibus farm bills, with the next one likely to be debated for passage in 1995. The annual budget-reconciliation process and agricultural appropriations bills offer intermediate opportunities for revisions in commodity support programs. The high expenditures on commodity support programs and the previously successful implementation of the flex-acreage program have made it very likely that flex acreage will be increased in the current budget-reconciliation process. This revision provides the opportunity for reducing expenditures on commodity support and increasing the adaptability of farmers to climate change. A further increase in flex acreage or other more substantial revisions in commodity programs (e.g., introduce normal crop acreage) would probably have to be considered in the 1995 Farm Bill.

• Use the 1995 Farm Bill to modify disaster assistance programs. Since the late 1970s, Congress has been considering how to best structure the crop insurance and disaster-payment programs. After a flurry of proposals and studies before the passage of the 1990 Farm Bill, the programs were left essentially unchanged. There is, however, an ongoing sense of frustration with the current system that suggests that major revisions are likely to be considered in the 1995 Farm Bill. It remains unclear what the best option is for revising these programs. However, any program that provides a greater incentive for farmers to reduce their exposure to risk should help in preparing for the risks of a climate change. Features of a restructured system might include:

• defining disasters formally, with assistance provided only for unusual losses;

• eliminating either crop insurance or disaster payments (i.e., do not have one program undercut the incentives to participate in the other);

• limiting the number of times a farmer could collect disaster payments; and

• requiring farmers to contribute to a disaster-payment fund (payment could be related to past claims), thus providing an incentive to reduce exposure to risks.

• Enhance the agricultural technology base. Congress could act to enhance research in computerized farm-management systems. The competitiveness of the farm sector will increasingly depend on technological advances that improve the efficiency of U.S. farmers--rather than on further increases in mechanization and intensity of input use. Computerized farm-management systems will be increasingly important to the farmer's ability to increase yields, control costs, and respond to environmental concerns. Limiting the runoff and leaching of farm chemicals depends most on careful timing of application and on applying only what is needed.

  ARS has suggested that about $6 million annually would allow considerable improvement in its current program.[32] Funding this full $6 million program or similar support by Congress would provide for the development and broader use of technologies that have the potential to greatly enhance the efficiency of farming and increase the flexibility with which farmers can respond to climate conditions. ARS already provides leadership in this area.

NOTE: Parts of this chapter are drawn from a paper prepared by W.E. Easterling for the Office of Technology Assessment (27).

1 Cropland is land used for the production of cultivated crops (e.g., grains, hay, fruits, and vegetables) for harvest. Pastureland is land used for grazing, including once-forested land converted to forage cover and natural grasslands that are productive enough to support active management of forage plants. Rangelands are natural grasslands of low productivity.

2 The food sector includes farm production plus the associated procesing, manufacturing, transport, and marketing industries. The farm-production sector itself employs just 1.5 percent of the U.S. civilian labor force and provides 1.2 percent of the gross national product.

3 To convert acres to hectares, multiply by 0.405.

4 This includes lands that have high or medium potential for conversion to agriculture (see table 7 in the appendix of ref. 112).

5 About 65 percent of vegetable crops and 80 percent of orchard crops are irrigated (107).

6 Between 1970 and 1992, the average consumer's food budget declined from 22 to 16 percent of total purchases (113). Only one-quarter of the consumer's food budget now pays for the cost of basic agricultural commodities, as compared with one-third in 1970 (113).

7 Although with other competing industrialized countries likely to be faced with similar environmental regulation, it is somewhat unclear how U.S. competitiveness might be affected.

8 It is unclear how climate change might affect farm structure. The large, specialized farming enterprises may prove to be financially and managerially better prepared to respond to climate changes than the typical smaller farm. On the other hand, it could be that smaller farms with low capitalization, high diversification in source of income, and low input requirements will prove less vulnerable to climate change.

9 Farms producing under $40,000 in gross sales do not produce enough income to support a family by today's living standards. Many of these farms are owned by individuals who work full time in other jobs (91).

10 Farms producing over $100,000 in revenues average over 1,500 acres.

11 Note that despite improved water-use efficiency, crop water requirements may increase because of the larger plant size.

12 The categorization of plants as C3 or C4 is based on the mechanism by which CO2 is used in the cell (see ch. 2). At elevated CO2 concentrations, the inefficiency of the C3 process in producing sugars is overcome, and C3 plants respond with greater improvements than do C4 plants.

13 The male flowers that form on the top of corn plants are commonly referred to as tassels.

14 Direct effects of elevated CO2 may not be significant on grazing lands constrained by moisture and nitrogen. It is possible, however, that increased carbon uptake by forage plants without corresponding increases in the amount of nitrogen assimilated by those plants could reduce their nutritional value for livestock (40).

15 Deoxyribonucleic acid.

16 Some fear that the development of herbicide-tolerant plants will lead to an increased use of herbicides. So far, however, efforts have been focused on developing plants that tolerate one of the more benign herbicides, allowing less use of persistent and toxic herbicides (30). See reference 103 for a discussion of the risks related to the uses of biotechnology.

17 Production of canola, a spring rapeseed low in erucic acid, developed in Canada, and suitable for human and animal foods, is now expanding rapidly in the Northern Plains States.

18 Referred to subsequently as the 1990 Farm Bill.

19 Previous OTA reports have noted how this inflexibility in farm programs has inhibited the introduction of new industrial crops (102), discouraged conservation rotations (100), and favored the production of greater amounts of--rather than higher-quality--crops (98).

20 Senator Rudy Boschwitz, R-MN. Address presented at a conference held by the Center for the Study of Foreign Affairs, Arlington, VA, Nov. 25, 1986.

21 There are some restrictions on the Crops that can be planted. Fruits and vegetables are not allowed, and certain other crops are excluded at the discretion of the Secretary of Agriculture. These exclusions have included peanuts, tobacco, trees, and tree crops.

22 The NCA approach was briefly used by USDA in 1978 and 1979. Although there is little indication that there were any fundamental problems, it was later abandoned by the agency and the Senate Agricultural Committee. See reference 29 for details on NCA programs.

23 See reference 28 for discussion of proposals to decouple farm-income-support payments from yields. Even with payments that are unrelated to farmyields, any subsidy will tend to encourage a higher level of farming activity than would otherwise be profitable (28). Farmers have been reluctant to accept income support that is independent of farm yields, perhaps fearing that such an approach seems more like welfare.

24 In 1991, 8.3 of 41.3 million potential flex acres were converted from the original program crops.

25 It appears likely that as a budget-cutting measure, normal flex acreage will be increased to 20 percent under the 1994 Budget Reconciliation Bill.

26 The Federal Crop Insurance Commission Act of 1988 (P.L. 100-546) authorized the formation of a 25-member commission to identify problems with the crop insurance program and to make recommendations for increasing farmer participation.

27 The highest level of coverage that can be purchased requires farmers to absorb the first 25 percent of losses. Many farmers consider such losses sufficiently rare that insurance is an unneeded expense.

28 Before the Tax Reform Act of 1986 (P.L. 99-514) was passed, taxes could be computed on the basis of "income averaging." Farmers who regularly experience fluctuating incomes, have felt they were unfairly treated by the elimination of this provision (31). The approach offered here provides the benefits of income averaging, plus a strong incentive to actually smooth fluctuations in income.

29 Subsidies that lower the capital cost of installing new irrigation equipment may encourage conservation by farmers already using irrigation; they could also lead to the undesirable outcome of more overall irrigation. This should not be an insurmountable problem.

30 At the least, it should be recognized that the benefits of biotechnology will ultimately be put in place through the efforts of plant breeders.

31 Usually, only nominal rents must be paid for setting up experimental plots on farmers' fields. The State of Illinois has found it cheaper to use farmers' fields than to own cropland and has been able to sell some research facilities as a result.

32 J. Van Schlifgaarde, Associate Deputy Administrator, Agricultural Research Service, U.S. Department of Agriculture, personal communication, July 1993.

CHAPTER 6 REFERENCES

1. Acock. B., "Effects of Carbon Dioxide on Photosynthesis, Plant Growth and Other Processes," in: Impact of Carbon Dioxide, Trace Gases, and Climate Change on Global Agriculture: Proceedings of a Symposium, Special Publication 53 (Madison, WI: American Society of Agronomy, Crop Science Society of America, and Soil Science Society of America, 1990), pp, 45-60.

2. Acock, B., and M.C. Acock, "Modeling Approaches for Predicting Crop Ecosystem Responses to Climate Change," discussion paper, USDA-ARS Systems Research Laboratory, Beltsville, MD, 1990.

3. Adams, R, J.D. Glyer, and B. McCarl "The Economic Effects of Climate Change on U.S. Agriculture: A Preliminary Assessment," in: The Potential Effects of Global Climate Change on the United States, Appendix C, Volume 1, J. Smith and D. Tirpak (eds.) (Washington, DC: U.S. Environmental Protection Agency, 1989), pp. 4-1 to 4-56.

4. Adams, R, et al., "Global Climate Change and U.S. Agriculture," Nature, vol. 345, No. 6272, May 1990, pp. 219-234.

5. Allen, L.H., Jr., "Plant Responses to Rising Carbon Dioxide and Potential Interaction with Air Pollutants," Journal of Environmental Quality, vol. 19, 1989, pp. 15-34.

6. Bazzaz, F.A., and E.D. Fajer, "Plant Life in a CO2-Rich World," Scientific American, vol. 266, No. 1, January 1992, pp. 68-74.

7. Blasing, T. J., and A. Solomon, Response of the North American Corn Belt to Climatic Warming, Publication 2134, Environmental Sciences Division (Oak Ridge, TN: Oak Ridge National Laboratory, 1982).

8. Bockstadter, T.L., et al., Irrigation Management Component of the Agricultural Energy Conservation Project: Final Report (Lincoln, NE: University of Nebraska Cooperative Extension, 1989).

9. Boggess. W.G., K.A. Anaman, and G.D. Hanson, "Importance, Causes and Management Responses to Farm Risks: Evidence from Florida and Alabama," Southern Journal of Agricultural Economics, vol 17, No. 2, 1985. pp 105-116.

10. Bonnen, J.T, "A Century of Science in Agriculture: Lessons for Science Policy," in: Policy for Agricultural Research, V.W. Ruttan and C.E. Pray (eds.) (Boulder CO: Westview Press, 1987), pp. 105-137.

11. Bowes, M.D., and P. Crosson, "Consequences of Climate Change for the MINK Economy: Impacts and Responses," Climatic Change (in press).

12. Changnon. S.A., "The 1988 Drought, Barges, and Diversion," Bulletin of the American Meteorological Society, vol. 70, 1989, pp. 1092-1104.

13. Chite, R.M., Library of Congress, Congressional Research Service, "Crop Insurance Reform: A Review of the Commission Recommendations," 89-624 ENR, November 1989.

14. Chite, R.M., Library of Congress, Congressional Research Service, "Federal Crop Insurance: Current Issues and Options for Reform," 92-318 ENR, March 1992.

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